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The Capital Market Authority eliminated the Qualified Foreign Investor framework that required a minimum of $500 million in assets under management and abolished swap agreements in changes announced on January 6 that take effect on February 1. Experts told Arab News the measures could unlock between $9 billion and $10 billion in fresh capital beyond the SR519 billion already held by foreign investors in the main market as of the third quarter of 2025. Hamza Dweik, head of trading at Saxo Bank for the Middle East and North Africa, told Arab News that the greater participation will deepen liquidity in a bourse valued at more than SR3 trillion while raising Saudi Arabia’s weighting in global emerging-market indices from approximately 3.2 percent to 4.7 percent.
Kapil Chadda, partner at Arthur D. Little’s Financial Services Practice, told Arab News that the opening allows both institutional and private investors to access listed Saudi companies directly. This development places the kingdom on equal footing with other competitive emerging markets such as Brazil, India and China that have long offered simpler entry. Chadda added that the broader investor base should drive higher liquidity, trading volumes and valuations through sustained demand for shares while simplifying procedures by removing complex qualification hurdles.
The reforms support Saudi Arabia’s Vision 2030 program that seeks to diversify the economy away from reliance on oil revenues. According to the US Department of State’s investment climate statements the kingdom aims to increase foreign direct investment to 5.7 percent of GDP by 2030 with the National Investment Strategy targeting net annual FDI flows of $103 billion. Vijay Valecha, chief investment officer at Century Financial, told Arab News that the CMA decision will advance these ambitions by encouraging global investors to engage with the kingdom’s growth story and gain exposure to a rapidly developing market.
Foreign investors are expected to concentrate on sectors prioritized under Vision 2030 including technology and digital transformation as well as renewable energy, green hydrogen, mining, metals, logistics and infrastructure. Dweik highlighted that inflows will also target booming areas such as tourism, healthcare and entertainment where petrochemical profits are projected to rise by 74 percent and healthcare by 23 percent in the near term. Tony Hallside, CEO of STP Partners, said the CMA move marks a pivotal step in building the most accessible, liquid and globally integrated financial markets in the region while reflecting commitment to new capital sources that accelerate the diversification agenda.
The Saudi stock market registered an immediate positive reaction with all 20 sector indexes rising and 212 listed stocks advancing on the day after the announcement. Dweik forecast that after a nearly 13 percent decline the previous year the bourse should deliver mid-single-digit earnings growth and a 5 to 10 percent increase in trading volumes in 2026 backed by the additional foreign inflows. Amol Shitole, head of fixed income at Mashreq Capital, told Arab News that near-term sentiment will likely stay positive although the eventual scale of inflows will hinge on planned reviews of foreign ownership limits later this year.
Experts noted potential challenges including per-investor ownership caps of 10 percent and aggregate foreign holding limits of 49 percent alongside needs for greater regulatory clarity and governance standards. Chadda emphasized that maintaining transparency at the highest levels and ensuring equal representation of minority and foreign shareholder rights will prove essential to foster lasting market confidence. Shitole observed that initial demand will probably focus on liquid index heavyweights such as Saudi Aramco and major banks with longer-term outcomes depending on government spending, progress on economic diversification and underlying sector earnings rather than access changes alone.
