Saudi Arabia’s capital market has witnessed a significant influx of foreign investment, with the total value tripling to SAR 347.01 billion by the end of 2022, which now accounts for 14.2% of the market’s free float shares. This growth marks a substantial increase from SAR 86.86 billion in 2018, as stated by Abdullah Mohammed Binghannam from the Capital Market Authority (CMA).
The CMA has been actively pursuing initiatives to diversify its investor base and increase the attractiveness of the Saudi market to global investors, particularly following the opening to foreign investors in 2015. The surge in investment is a direct result of Saudi Arabia’s inclusion in global emerging market indices in 2019, which led to qualified foreign investors (QFIs) holding SAR 271.23 billion by late 2022—representing a significant 78% of the total foreign investment during this period.
The CMA’s strategic plan aims to elevate Saudi Arabia’s position in the global financial landscape and attract additional foreign capital. Key measures contributing to this growth include allowing direct investment opportunities in debt instruments and implementing simplified Rules for Foreign Investment in Securities.
These advancements are expected to benefit the Saudi economy by improving cash flows and facilitating knowledge transfer between international and local businesses, thereby propelling economic development. The record level of net foreign investment, which exceeded SAR180 billion (USD1 = SAR3.7505) from 2018-2022, alongside daily trading volumes from foreigners surpassing 17% post-market opening, underscores the country’s growing appeal to international investors.
The unrestricted access for foreigners to the Saudi debt instruments market since late-2020 has also contributed to this trend, further highlighting the country’s commitment to fostering an open and dynamic financial environment.