Saudi Arabia’s stock market staged its biggest rally since 2020 after Bloomberg reported the kingdom may relax foreign ownership caps on listed companies, a move that could trigger billions in inflows.
The Tadawul All Share Index jumped 5.1% on Wednesday, adding $124 billion in market value, after a Capital Market Authority board member said majority foreign ownership could come into effect by year-end. Saudi bank stocks surged 9.2%, with Al Rajhi Bank up 10%. JPMorgan and EFG Hermes expect the lender alone could attract $5–6 billion in fresh capital.
The potential rule change would mark a historic shift. Foreign investors are currently capped at 49% ownership, and lifting that ceiling above 50% would allow overseas funds to hold controlling stakes for the first time. Analysts at JPMorgan and EFG see inflows of about $10 billion, while Franklin Templeton says the full removal of limits could unlock more than $10 billion in passive flows and nearly double Saudi’s weight in MSCI’s emerging-market index.
The UAE allowed 100% foreign ownership of businesses in 2019, and Riyadh is under pressure to deepen its capital market as part of Crown Prince Mohammed bin Salman’s broader economic reform drive. For now, Saudi equities have been among the world’s laggards in 2025, down more than 5% as oil prices slipped and local investors sold off. The MSCI All Country World Index, by contrast, is up nearly 17%.
The prospect of relaxed curbs gave Tadawul a rare jolt, but sustainability will depend on fundamentals, with geopolitical tensions, oil price weakness, and government spending cuts all still likely to weigh on the outlook. Even so, foreign investors have been steadily adding exposure, seeing value in depressed valuations while domestic sellers pull back.
