Saudi Stock Market Jumps as Regulator Plans to Ease Foreign Ownership Rules
Saudi Arabia’s stock market had its biggest rise in more than five years on Wednesday. This came after the market regulator said it may relax rules that limit how much foreign investors can own in Saudi-listed companies. Investors believe this move could bring billions of dollars into the country.
Market performance
The Tadawul All Share Index climbed 5.06% to $3,046.6 (SAR 11,426.45), adding about $124 billion in value to the market.
The Capital Market Authority (CMA) said it is close to easing the current rule that allows foreigners to own only up to 49% of a company. If the cap is removed, foreign investors could own majority stakes for the first time. This would bring Saudi Arabia in line with countries like the UAE, which allowed full foreign ownership in 2019.
Bank stocks lead the rally
Banks saw the strongest gains. Al Rajhi Bank, the world’s largest Islamic lender, rose 9.95%—its biggest jump in nearly 20 years, hitting the maximum allowed in a single day. Saudi National Bank also nearly reached the 10% daily limit, its best result since going public in 2014.
Overall, the banking sector rose more than 9%, as investors expect banks to benefit the most from greater foreign investment.
Impact of reforms
So far in 2025, Saudi stocks have lagged behind global markets due to weak oil prices, regional tensions, and cautious government spending. While the Saudi index is down more than 5% this year, the MSCI All Country World Index is up nearly 17%.
Analysts say the proposed rule change could help Saudi Arabia catch up. JPMorgan estimates foreign inflows of up to $10.6 billion if full ownership is allowed, while EFG Hermes predicts around $10 billion.
Al Rajhi Bank alone could attract $5–6 billion in foreign investment. An increase in Saudi Arabia’s weight in the MSCI Emerging Markets Index—from 3.3% to about 4%—could also bring in more money from global funds.
Salah Shamma of Franklin Templeton said removing the cap entirely could unlock over $10 billion in new investments, push major reweightings in global indexes, and raise Saudi’s share in emerging market benchmarks.
Uncertainty remains
The CMA has not yet confirmed the final details, and it is unclear if foreigners will be allowed to own more than 50%. The success of any reform will also depend on Saudi Arabia’s broader economic outlook.
For policymakers, this step supports Crown Prince Mohammed bin Salman’s strategy to grow local capital markets and reduce reliance on oil.
Published: 25th September 2025
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