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Saudi Arabia’s foreign investments jump by 300% over last 5 years

As the kingdom progresses toward Vision 2030, striving to diversify its economy beyond oil, foreign investment in the capital markets has been steadily increasing.

Saudi Arabia’s foreign investments jump by 300% over last 5 years
[Source photo: Anvita Gupta/Fast Company Middle East]

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Foreign investments in Saudi Arabia’s capital market experienced a 300% surge, reaching nearly $92.53 billion by 2022, a significant rise from $22.9 billion in 2018. This increase aligns with the kingdom’s diversification strategy to reduce reliance on oil.

The Capital Markets Authority reports that foreign investments in 2022 accounted for 14.2% of the total free float value in the primary market. This reflects a substantial rise from the 3.77% recorded on Tadawul in 2018.

Abdullah Binghannam, Deputy President of CMA, highlighted that the significant growth underscores the rising international confidence in the Saudi market. Additionally, he mentioned that CMA plans to enhance the country’s capital market regionally and internationally.

The primary market in Saudi Arabia experienced a surge in foreign investments, surpassing $47.9 billion from 2018 to 2022.

“Since allowing foreign investors to directly invest in the capital market in 2015, the Saudi Capital Market has evolved from a local market to one where the foreign investor participates in daily trading at rates exceeding 17%, compared to less than 4% before,” said the statement. 

Moreover, the CMA reported that the contribution of foreign investors to company offerings has increased. Conversely, foreign investor ownership in the national debt instruments market has surged more than tenfold since the market was opened to all categories of foreign investors without restrictions by the end of 2020.

Over the past five years, the CMA has implemented initiatives to encourage greater participation from foreign investors in the kingdom’s capital market. These initiatives include allowing direct investment in debt instruments and approving instructions for International Central Securities Depositories.

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