The Saudi stock market recorded a significant jump in its early trading on Wednesday, topping the performance of Gulf stock exchanges, in an immediate and positive response to the Kingdom’s announcement of a historic step to open the capital market to all categories of foreign investors without restrictions, starting next February.
The Tadawul All Share Index (TASI) surged by a robust 2.5%, marking its largest daily gain in over three months. This broad-based rally encompassed most market sectors, with finance, consumer discretionary goods, and healthcare leading the way, reflecting widespread optimism among traders regarding future market liquidity.
Performance of leading stocks
The decision had a direct impact on leading stocks; shares of Al Rajhi Bank, a heavyweight in the index, rose by 2.1%. Shares of oil giant Saudi Aramco also saw an increase of 1.1%. Notably, shares of the Saudi Stock Exchange (Tadawul) jumped by as much as 7%, reaching their highest level since late September, reflecting expectations of increased trading volume and financial activity in the coming period.
The end of the era of "qualified foreign investor"
These strong gains followed the Capital Market Authority's announcement on Tuesday of the cancellation of the "Qualified Foreign Investor" system and the removal of restrictions that previously limited international investor access. Under the new decision, all foreign investors will be able to invest directly in the main market starting February 1, 2026. This move culminates a long process of structural reforms that began years ago with the partial opening of the market, followed by inclusion in global emerging market indices such as MSCI and FTSE Russell.
Economic importance and historical context
This bold move comes within the framework of the Kingdom's Vision 2030, which aims to diversify the economy and reduce dependence on oil. Fully opening the financial market is a cornerstone for attracting direct and indirect foreign investment, thereby deepening and enhancing the efficiency of the Saudi financial market. Historically, the Saudi market was closed to foreigners, then they were allowed entry through swap agreements, followed by the Qualified Investor system in 2015. Today, the market has reached full maturity by opening its doors to everyone.
This decision is expected to contribute to increased foreign capital inflows, improved liquidity levels, and enhanced governance and transparency practices in listed companies to meet the expectations of international investors. The Capital Market Authority noted that foreign investor holdings have witnessed significant growth, exceeding SAR 590 billion by the end of the third quarter of 2025, compared to SAR 498 billion at the end of 2024, underscoring the increasing attractiveness of the Saudi market.
