Saudi Arabia Witnesses a 300% Increase in Foreign Investment in Capital Markets

Saudi Arabia has long been recognized as the largest economy within the GCC. In recent years, significant economic liberalization has led to an influx of foreign investment into the country's capital markets. The most recent figures show a startling 300% increase in the value of foreign investments from 2018 to the end of 2022, reaching SAR 347 billion.

The Growth of Foreign Investment

The rise in investment has been remarkable. Just a comparison from a few years back, foreign investment accounted for only 3.77% of the total value of free float shares in 2018, a mere SAR 86.86 billion, which has grown to constitute 14.2% by 2022.

However, these numbers represent more than immediate trends; they're the result of policies unfolding over several years. The Saudi government began permitting direct foreign investment in its capital market in 2015, and since then, there has been a significant shift. Foreign investors now engage in daily trading, which make up more than 17% of the volume, a stark increase from the previous figure of less than 4% before the market was opened to international investors.

Rising Interest in Saudi Debt Instruments

There's also been a noteworthy surge in the interest towards Saudi debt instruments. Since foreign investors were given unbridled access in 2020, ownership has seen a more than tenfold escalation.

Outpacing Global Trends

The Kingdom of Saudi Arabia isn't just succeeding in the financial sector. Against a backdrop of slow global economic growth, Saudi Arabia stands out, with forecasts indicating a robust GDP growth. According to Moody’s, Saudi Arabia's economy is projected to expand by 4.6% in the upcoming year, outpaced globally only by India and Indonesia.

This growth comes amid a period when many Western nations are grappling with growth rates below 1%, high inflation, and soaring interest rates. Thus, Saudi Arabia's economic performance paints a promising picture not only for itself but also for the broader GCC region as it continues to elevate its economic standing on the world stage.

investment, growth, economy