In its latest report, JPMorgan Chase confirmed that the most significant regulatory change anticipated by international investors in the Saudi financial market is the amendment to foreign ownership limits, noting that this step will have a broad and positive impact on the market's attractiveness and investment depth. The bank anticipates that these structural changes will be fully implemented by the second half of 2026.
Historical context and structural reforms
These projections come amid a series of economic reforms underway in Saudi Arabia as part of its Vision 2030, which aims to diversify income sources and reduce dependence on oil. Since opening the Saudi market to qualified foreign investors for the first time in 2015, and subsequently joining global emerging market indices such as MSCI and FTSE Russell, the Capital Market Authority has continued to work on liberalizing the market and making the investment environment more flexible and internationally competitive.
Instant market reaction
In response to these positive developments, trading on the Saudi Stock Exchange (Tadawul) saw exceptional activity, with trading volume exceeding SAR 1.5 billion just half an hour after the session opened. Vital sectors such as banking, telecommunications, and healthcare witnessed increased demand, reflecting investor confidence in the future prospects of the Tadawul All Share Index (TASI) and its leading listed companies.
Lifting restrictions and boosting liquidity
This momentum coincides with the implementation of significant amendments that will allow all categories of foreign investors to invest directly in the main market starting February 1, 2026. According to the Capital Market Authority's announcement, this move primarily aims to broaden and diversify the investor base, as well as enhance market liquidity. The decisions included abolishing the concept of a "qualified foreign investor," enabling direct investment in listed shares without the need to meet complex qualification requirements or enter into prior swap agreements, thus removing traditional barriers to capital flows.
Growth of foreign investments
Official data from the Capital Market Authority (CMA) indicates a steady increase in foreign investor confidence, with international investors' holdings in the Saudi stock market reaching approximately SAR 590 billion by the end of the third quarter of 2025. Investments in the main market specifically reached around SAR 519 billion, representing a significant increase compared to 2024, when holdings totaled SAR 498 billion.
Economic and strategic impact
Economists believe that opening the market to all sectors without restrictions will strengthen the Saudi market's position as one of the largest financial markets in the region and support the Kingdom's ambition to be included among the top 10 global financial markets. Furthermore, increased foreign capital inflows will contribute to improved pricing efficiency, enhanced corporate governance, and the provision of necessary financing for the major projects the Kingdom is undertaking during its current economic transformation phase.
