Saudi Arabia Opens Stock Market to All Foreign Investors to Drive Capital Inflows

Saudi Arabia has taken a major step towards capital market liberalisation by opening its equity market to all foreign investors, removing long-standing eligibility and qualification requirements, as per Bloomberg report.  

The move is part of broader reforms aimed at reviving market activity and attracting global capital into the region’s largest stock exchange. 

End of Qualified Foreign Investor Framework 

The Saudi Capital Market Authority has scrapped the Qualified Foreign Investor (QFI) framework for the main market.  

Earlier, foreign investors were required to meet thresholds such as managing at least $500 million in assets to participate directly.  

With the revised rules, all categories of foreign investors can now trade Saudi equities without meeting any minimum qualification criteria. 

Direct Market Access from February 

Under the new regime, non-resident investors will be permitted to invest directly in the main Saudi equity market starting February 1.  

The reform is expected to expand investor participation at a time when authorities are seeking to reverse weakness in the domestic stock market, where the benchmark index fell nearly 13% last year, underperforming several emerging-market peers. 

Foreign Ownership and Market Impact 

Foreign holdings in Saudi equities stood at more than SAR 590 billion at the end of September, with the bulk invested in the main index.  

Regulators believe the removal of entry barriers will help attract incremental international inflows, supporting liquidity and valuations across the market. 

The reform comes amid rising fiscal pressure as elevated government spending and lower oil revenues widen budget deficits, increasing reliance on external capital to sustain investment momentum. 

Boost for IPO Pipeline and Listings 

A broader foreign investor base is expected to support Saudi Arabia’s growing pipeline of public offerings.  

Dozens of companies are currently seeking approval to list shares, with applications continuing to rise. Market participants expect easier foreign access to strengthen demand for upcoming listings and improve overall market depth. 

Read More: India, Saudi Arabia Sign Agreement to Enhance Official Travel and Bilateral Ties! 

Conclusion 

By eliminating foreign investor qualification requirements, Saudi Arabia has signalled a decisive shift towards deeper capital market integration. The reform strengthens the kingdom’s appeal to global investors, supports its listing pipeline, and positions the equity market for renewed interest after a challenging year. 

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