Foreign investor ownership in Saudi stock market rose to 16.74% by the end of March

The Saudi financial market witnessed a significant increase in the ownership of qualified foreign investors, with their share of free float capitalization reaching 16.74% by the end of March 2025, the highest level recorded in the past five years, according to a report issued by Al Rajhi Capital based on Tadawul data.

The foreign ownership ratio was approximately 12% in March 2020, then witnessed a gradual increase, peaking at 15.75% at the end of 2021, before declining to 12.89% in March 2022. The ratio fluctuated during 2022 and 2023, reaching 12.83% in December 2023, before rising sharply again in the first quarter of 2024.

This increase reflects the Capital Market Authority’s efforts to develop the regulatory environment to attract foreign investors. In May 2023, the CMA approved the rules governing foreign investment in securities. These included facilitating the entry procedures for foreign investors into the Saudi financial market, easing disclosure requirements and ongoing obligations, and developing the qualification requirements that must be met by qualified foreign investors to invest in shares listed on the main market.

The amendments also included abolishing the requirements for submitting a qualification application and a qualified foreign investor assessment agreement, leaving only the requirements for opening an investment account. They also developed the conditions for non-resident foreign investment in listed securities through swap agreements, including abolishing the condition imposed on the agreement term and abolishing the requirement to notify the CMA prior to concluding a swap agreement.

These steps are part of the CMA’s efforts to enhance the attractiveness of the Saudi financial market to foreign investment, increase liquidity, and expand the investor base, in line with the objectives of the Kingdom’s Vision 2030.