The Saudi stock market achieved its biggest gain since last September on Wednesday, after the Tadawul All Share Index (TASI) rose 2.5% at the opening following the decision by the Saudi Capital Market Authority to open the market to all categories of foreign investors, after entry had previously been limited to qualified foreign investors, swap agreements and residents.
The general index opened trading after breaking through the 10,500-point level, which it had traded below for three consecutive sessions. This was supported by broad gains across the majority of listed stocks, with 260 companies seeing their share prices rise, while only three declined and three remained unchanged. However, the index subsequently retreated slightly below that level, trading near 10,460 points.
Healthcare and communications are among the top beneficiaries
Hisham Abu Jamea, senior advisor at Naif Al Rajhi Investment Company, described the decision to open the market to all categories of foreign investors as historic and the most impactful on the market in ten years, stressing that its impact begins the moment it is announced, even if the full implementation will be carried out on February 1, which may help the market to recover part of its recent losses.
Abu Jamea explained that the market was previously almost exclusively limited to foreign institutional investors, while the current decision opens the door for greater entry for segments of international investors, with his expectation that the base of institutional investors coming from the United States, Europe and China in particular will expand.
He added that the healthcare, communications and information technology sectors will be at the forefront of those benefiting from the decision, with the positive impact extending to various listed companies.
Mary Salem, a financial analyst at Al-Sharq, said the move would have a clear positive impact on the market, noting that the banking, energy, telecommunications and real estate sectors would be among the first to benefit from increased external demand.
The authority approved the implementation of the decision starting from next February, with the aim of diversifying the investor base, which supports the flow of investments and enhances the level of liquidity.
For his part, Ikrami Abdullah, senior financial analyst at Al-Eqtisadiah newspaper, believes that the timing of the decision coincided with a period of decline in market indicators and weak liquidity, agreeing with Salem on its positive impact, and considering the decision as one of the catalysts for supporting liquidity in the market significantly, given that it will open the door for new categories of foreign investors to enter the market.
Foreign investor ownership in the Saudi market
Foreign investors’ ownership in the financial market reached more than 590 billion riyals by the end of the third quarter of 2025, while international investments in the main market recorded about 519 billion riyals during the same period, compared to about 498 billion riyals at the end of 2024, according to official data.
Following the decision to open the market to foreign investors, the market is now awaiting another equally important decision: raising the ceiling on foreign ownership in listed companies, which currently stands at 49%. Abdulaziz Abdulmohsen bin Hassan, a member of the Capital Market Authority's board of directors, had anticipated the decision would be implemented before the end of last year, but this has not yet occurred. Analysts believe the anticipated decision could pave the way for significant foreign investment inflows. According to estimates by JPMorgan Chase, raising the limit to 100% could attract inflows of $10.6 billion.
