RIYADH: Saudi Arabia’s Tadawul All Share Index surged at opening on Jan. 7, posting its largest single-day gain since September 2025, following the Kingdom’s Capital Market Authority decision to fully open the market to all categories of foreign investors.

The benchmark index opened with a sharp rise, climbing 2.5 percent and breaking through the 10,500-point barrier. The rally was broad-based, with 260 listed companies advancing, while only three declined and three remained unchanged. The index later settled slightly below that peak, trading near 10,460 points.

The CMA announced that, effective Feb, 1, it will eliminate the previous framework that restricted direct market access primarily to Qualified Foreign Investors and those using swap agreements. The regulatory change will allow all international investors to participate directly in the Main Market without needing to meet prior qualification requirements.

“This is a historic decision and the most positively impactful market development in ten years,” Hesham Abou Jamee, chief adviser at Naif Al Rajhi Investments told Asharq Business. He emphasized that the market impact is immediate, despite full implementation being weeks away, and should help the market recover recent losses.

The CMA stated the amendments aim to expand and diversify the investor base, supporting investment inflows and enhancing market liquidity.

Al-Eqtisadiah newspaper financial analyst Ikrami Abdullah agreed on the decision’s positive impact, noting its timing coincides with a period of market decline and weak liquidity, as reported by Asharq Business.

Official data shows foreign investor ownership in the Saudi capital market exceeded SR590 billion ($157.32 billion) by the end of the third quarter of 2025, with international investments in the Main Market reaching approximately SR519 billion.

Market participants are now anticipating a follow-up decision to raise the current 49 percent ceiling on foreign ownership in listed companies.

Asharq Business reported that analysts suggest such a move could unlock substantial inflows, with J.P. Morgan estimating that lifting the limit to 100 percent could attract an additional $10.6 billion.

The reform is a key part of Saudi Arabia’s broader economic diversification agenda, following other initiatives to attract foreign capital, such as establishing exchange-traded funds with partners in Japan and Hong Kong.

Leading financial institutions welcomed the move. SNB Capital congratulated the CMA on this “fundamental development that enhances liquidity and market depth,” while Al Rajhi Capital greeted “investors from around the world,” calling it “a new step toward wider opportunities and more open investment.”