RIYADH: The Saudi Capital Market Authority has announced that a review of the rules restricting foreign ownership in local stocks is underway, as the Kingdom seeks to further open up to international investors.

Board member Abdulaziz Abdulmohsen Bin Hassan confirmed that “the foreign ownership limits are under review,” referring to the current caps that prevent foreign investors from holding majority stakes in local companies.

He added: “We are committed to completing this and hope to do so this year.”

Review of Cap continues

The remarks, made at the Capital Markets Forum Select in New York on Feb. 2, indicate that the regulator is moving forward with plans to raise the ownership cap from 49 percent this year, following months of uncertainty surrounding the issue.

Bin Hassan did not elaborate on the next steps, but the CMA stated that the review will examine whether the foreign ownership limits should be eliminated entirely or adopted in a phased approach.

A long-awaited decision could boost foreign investment flows

A change to the rules is one of the most anticipated developments in the Saudi financial market in 2026. Wall Street firms, including Goldman Sachs and JPMorgan, have stated that the complete removal of the cap could lead to new inflows of around $10 billion into the Riyadh stock exchange.

“Foreign capital is extremely important for Saudi Arabia, and it’s very important to highlight where we were four or five years ago,” Nayef Al-Athel, group chief of sales and marketing officer at Tadawul Group, told Bloomberg in an interview.

“We were a local market driven by individual investments, where about 80 percent of the investor base and liquidity came from individual investors. We made significant efforts to institutionalize the Saudi market, and today we are at a 50/50 split between institutions and individuals, with a large portion of institutional funds coming from foreign investors,” he added.

For his part, Yazeed Al-Dumeiji, CEO of Wamedh, the technology and innovation arm of the Tadawul, said in an interview on the sidelines of the forum that “the vast majority of our clients are from the US and Europe, and we are beginning to see growth from Asian investors, specifically from Singapore, Hong Kong, China, and Japan.”

Saudi Arabia’s anticipated move to liberalize its stock market comes as part of a package of recent reforms, including allowing all foreigners to trade directly in local stocks, and aims to attract more foreign direct investment to the Kingdom. This is part of Crown Prince Mohammed bin Salman’s efforts to build stronger financial markets, supporting his vision to diversify the economy away from oil with an investment volume approaching $2 trillion.

The Saudi stock market index, TASI, rose 8.5 percent in January, marking its best monthly performance since 2022, partly fueled by optimism surrounding these changes. The index also climbed 1.4 percent on Feb. 2.

Speaking at the Capital Markets Forum Select New York 2026, Tadawul CEO Mohammed Al-Rumaih explained that foreign ownership is expected to increase and reach $100 billion by 2030, according to Al-Eqtisadiah.

He also noted that the Saudi market capitalization now exceeds $2.5 trillion.

“The Saudi capital market is resilient and undergoing a radical transformation,” he said.

The CEO added: “We see many opportunities in our future collaboration with Nasdaq.”