Saudi Arabia has opened its stock exchange to residents of Gulf countries, who are now allowed to invest directly in the kingdom’s main Tadawul market. This move is expected to help attract more foreign direct investment into the Arab world's largest bourse.
The approved amendments also allow individual foreign investors who previously resided in Saudi Arabia or other countries Gulf countries to continue investing in listed equities on Tadawul even after their residency expires, the market regulator, the Capital Markets Authority (CMA) said.
“This step enhances the market's international openness and simultaneously builds a long-term investment relationship with broader segments of investors worldwide, within a more flexible and attractive regulatory environment,” Mohammed El-Kuwaiz, chairman of the CMA, said in a post on social media platform X.
Previously, Saudi investment by residents of the six-member economic bloc of the Gulf Co-operation Council was limited to the debt market, the parallel market “Nomu”, investment funds, and the derivatives market.
Their ability to trade in the main market was “limited to swap agreements as ultimate beneficiaries through capital market institutions or as clients of these institutions, where investment decisions are made on their behalf”, the CMA said.
The new measures come as Saudi Arabia continues to open its economy to foreign investors as part of its Vision 2030 programme.
Saudi Arabia launched its Vision 2030 programme in 2016 to diversify its economy away from oil, support private-sector growth, improve female workforce participation and reduce unemployment among citizens.
In recent years, the kingdom has introduced new laws, including companies law and civil transactions law, to attract more foreign investment.
Last week, it also updated its rules to allow foreigners to buy property in specific zones in Riyadh and Jeddah, with “special requirements” for home ownership in Makkah and Madinah.
Development of the kingdom's financial markets is also a central plank of the kingdom's economic overhaul and CMA, like its peers in the other GCC markets, is consistently updating regulations to make capital markets more attractive to local, regional and foreign investors.
Separately, Kuwait on Sunday announced it will start listing and trading of exchange-traded funds, sukuk and bonds on the Kuwait Stock Exchange in 2025, Reuters reported quoting Boursa Kuwait chief executive Mohammed Saud Al-Osaimi.
Stock markets in Saudi Arabia and across the gulf region have also seen a surge in initial public offerings amid growing investor demand over the past few years.
Last year, the kingdom led the Gulf region in IPO volumes with 15 listings on Tadawul and 27 share offerings on the Nomu market, raising more than $4.3 billion, according to a recent PwC report.
Markets in the UAE, Oman, Bahrain and Kuwait also maintained robust IPO momentum last year.
