Saudi Arabia will open its financial markets to all foreign investors starting 1 February, the Gulf country’s market regulator announced on Tuesday, aiming to attract more foreign investment and boost market liquidity.
The Capital Markets Authority (CMA) has approved amendments that eliminate the concept of the Qualified Foreign Investor. This change removes a rule that previously allowed only international investors with direct and consistent access to the Saudi capital market. With this new regulation, investors from around the world can now invest directly in the Saudi capital market.
Attracting Foreign Investment
Saudi Arabia has been actively working to attract foreign investors as part of its economic plan to reduce dependence on oil. The country has already taken several steps, including establishing exchange-traded funds with partners in Japan and Hong Kong. These efforts are part of a broader strategy to diversify the economy and attract more foreign capital.
Last year, regulators opened the door for foreigners to buy listed firms that own real estate in Mecca and Medina, without changing restrictions on direct land ownership. In September, Saudi stocks jumped following a report that the CMA might ease rules capping foreign ownership of listed companies.
At the end of the third quarter last year, international investors held 590 billion riyals ($157 billion) in the Saudi capital market, according to the CMA. This figure highlights the growing interest and confidence of foreign investors in the Saudi market.
Economic Reforms and Future Outlook
Saudi Arabia is more than halfway through its economic plan to reduce dependence on oil. The latest move to open the financial market to all foreign investors is expected to further boost this effort. By attracting more foreign investment, the country aims to improve market liquidity and support overall economic growth.
The decision to open the financial market to all foreign investors marks a significant milestone in Saudi Arabia’s economic reform journey, with experts expect this move to attract more foreign capital, enhance market liquidity, and support the country’s vision for a more diversified and robust economy.
