Arab News, Tue, Nov 21, 2023 | Jumada Al-Uola 6, 1445
Foreign investments in the Saudi capital market surge by 300% in last 5 years: CMA
Foreign investments in Saudi Arabia’s capital market surged 300 percent to
SR347.01 billion ($92.53 billion) in 2022 from SR86.86 billion in 2018 thanks to
the Kingdom’s economic diversification plans.
According to the Capital Markets Authority, the
foreign investment attracted in 2022 constituted 14.2 percent of the total free
float value in the primary market.
The increase is significant, considering that the
foreign funds accrued in 2018 represented 3.77 percent of the entire free float
value in Tadawul.
Abdullah Binghannam, deputy president of CMA for
listed companies and investment products, stated that this substantial growth
clearly indicates the rising international confidence in the Saudi market.
He further noted that CMA aims to strengthen the
Saudi capital market both regionally and internationally, emphasizing that
diversifying the investor base is critical to achieving that goal.
“The CMA has made major efforts in recent years to
increase the attractiveness of the Saudi capital market to foreign investors and
to encourage their entry and participation in the trading and offerings, as well
as in the general assemblies of firms,” said the authority in the statement.
Saudi Arabia’s primary market witnessed a
significant rise in foreign investments to reach unprecedented historic levels,
exceeding SR180 billion from 2018 until 2022.
“Since allowing foreign investors to directly
invest in the capital market in 2015, the Saudi Capital Market has evolved from
a local market to one where the foreign investor participates in daily trading
at rates exceeding 17 percent, compared to less than 4 percent before,” added
According to CMA, the contribution of foreign
investors to company offerings has risen, and foreign investor ownership in the
Saudi debt instruments market has increased more than tenfold since the debt
instruments market was opened to all categories of foreign investors without
restrictions by the end of 2020.
Meanwhile, qualified foreign investor ownership in
the Saudi capital market increased by 1877 percent, reaching SR271.23 billion in
2022, up from SR13.7 billion and SR134.48 billion in 2018 and 2019,
In 2022, QFIs accounted for 78 percent of total
foreign investment in the Saudi market.
Binghannam added that the CMA implemented various
initiatives in the last five years to increase foreign investors’ participation
in the Saudi capital market.
Some of the efforts by the CMA include allowing
foreign investors to invest in debt instruments directly and approving
instructions for International Central Securities Depositories. This step
facilitates attracting foreign investments to Sukuk and debt instruments in the