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Analysts and economists described the Saudi Capital Market Authority’s announcement that it will open the market to all categories of foreign investors, allowing them to invest directly starting in February, as a major turning point with a profound impact on the development of the main market (Tadawul).
They said the move would bolster market stability and increase its attractiveness to long-term capital, while also expanding and diversifying the investor base in listed companies, supporting stronger investment inflows and higher liquidity.
The CMA’s board has approved a draft regulatory framework that would allow nonresident foreign investors to invest directly in the main market, making the capital market accessible to a wide range of investors from around the world for direct entry.
According to media reports, the market’s initial reaction was positive. The main market index (TASI) rose about 1.5% in Wednesday trading to trade above 10,440 points, after 2025, a year in which the index fell 12.84% amid pressures linked to a liquidity squeeze.
The London-based Asharq Al-Awsat quoted analysts and experts as saying the decision represents a “turning point” that strengthens market stability and boosts its appeal to long-term capital.
They expect the opening-up to be reflected in improved corporate governance, greater transparency, and higher-quality disclosures among listed companies, factors global investors consider decisive.
In the same context, Rania Goul, a market analyst at XS.com, was cited by Zawya as saying that opening the market in this way is not aimed only at attracting new money but at “improving the market’s structure,” raising its efficiency, and broadening the participant base, steps that enhance trading depth and pricing efficiency and increase the market’s attractiveness within global investment portfolios seeking growth.
Ahmed Al-Rashid, a senior financial analyst, said the decision is not entirely new, as it had been floated in a survey last October, when market reaction was negative.
He said current indicators do not point to the entry of large foreign inflows because most major investment institutions are already present in the market.
He added that the previous regulatory framework already allowed institutional entry with a minimum threshold of $500 million, an amount he described as relatively low, meaning that abolishing this requirement is unlikely to create a significant additional institutional base.
As attention shifts to what will happen once the new rules take effect in February, analysts said the long-term impact will depend on continued improvements in disclosure and corporate governance, alongside the market’s ability to convert the initial momentum into a sustained path of liquidity and investment.
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