Saudi -Arab stock index jumps by 5%, most in 5 years after reducing the rules for foreign property

The shares of Saudi Aarabia booked their biggest daily increase since 2020 to Wednesday, after a report that the Markets Regulator can alleviate rules that tap the foreign ownership of listed companies.

The Saudi benchmark index has risen by more than 5% since May, after Bloomberg News reported that regulators could soon illuminate the 49% cap on the foreign ownership of listed companies, a movement that could help revive interest in the largest stock exchange of the Arab world.

“It could come into effect before the end of the year,” it was reported that CMA board member Abdulaziz Abdulmohsen Bin Hassan said in the report.

The benchmark index has so far fallen by 9.6% and is performing regional markets such as Dubai and Kuwait – 13.8% and 20% respectively – largely due to weaker oil prices.

The largest blue chips in the kingdom, shares ever anchoring the investor sentiment, have difficulty keeping a profit in 2025.

Saudi Aramco is falling around 10% to date, while consumer giants Almarai and Savola have fallen by 10% and 36% respectively. “We know that even with the current limit of 49% foreign property, we never have foreigners on average more than 15%, with most big caps,” said Mohammed Ali Yasin, CEO of GHAF venues at Lunate. Wednesday’s rally reflects the expectations that a relaxation of the rules would increase the weight of Saudi public companies in the larger MSCI and FTSE indexes, increasing the foreign inflow into those shares, he said.

“This step will also strengthen the liquidity and depth in the Saudi market and tighten the bid-axle spreads and expand institutional participation,” said Tariq Qaqish, deputy CEO of FH Capital in Abu Dhabi. Saudi Arabia has tried to attract foreign investors with efforts, including setting up funds with Asian partners in Japan and Hong Kong. In January, regulators also opened the door for foreigners to buy listed companies that have real estate in Mecca and Medina, without changing restrictions on direct land ownership.

A decrease of more than 1% in Dubai and Abu Dhabi shares on Wednesday was a reaction to the possible Saudi regulatory changes, Yasin said.