Net foreign purchases increase by 947% year-on-year, signalling strong confidence in Saudi Arabia’s Vision 2030.

Foreign investors have made a significant impact on the Saudi stock market, with net purchases reaching approximately SR3.84 billion ($1.02 billion) in September 2024. This remarkable figure represents a staggering 947% increase compared to the same month last year, underscoring the growing confidence in the Kingdom’s economic landscape.

According to the latest report from the Tadawul, Saudi Arabia’s stock exchange, net foreign purchases in September 2023 were a mere SR366 million. The sharp rise in foreign investment aligns with the Kingdom’s ambitious Vision 2030 initiative, which aims to transform Saudi Arabia into a global business hub.

Recent data from Statista highlights the rapid growth of the Saudi market, noting that the stock exchange boasts a market capitalisation of $2.93 trillion, ranking it as the third-largest in the Europe, Middle East, and Africa (EMEA) region. This robust performance indicates that foreign investors are increasingly viewing Saudi Arabia as a viable and attractive destination for their capital.

For the first nine months of 2024, foreign net purchases totalled SR16.4 billion, reflecting a 36% increase compared to the previous year. Qualified foreign investors led the charge, contributing SR3.78 billion to the market in September alone. In addition, foreign residents added SR76.62 million to their portfolios, further cementing their stake in the Saudi market.

By the end of September, the total value of foreign ownership in Saudi stocks had reached SR414.9 billion, a year-on-year increase of 13.39%. In contrast, Saudi individuals held stocks valued at SR946.32 billion in the main market, representing an 18.71% increase from the same period last year. Meanwhile, institutional investors reported stock holdings of SR8.66 trillion by the end of September, although this figure marked a 15.01% decline year on year.

Gulf Cooperation Council (GCC) investors also played a significant role, owning stocks worth SR77.72 billion in the main market by the end of September. This reflects a robust 36.85% increase compared to the previous year, indicating growing interest from regional investors.

The report further examined foreign ownership in Saudi Arabia’s parallel market, known as Nomu. By the end of September, foreign ownership in this market reached SR914.07 million, representing a remarkable 67.54% year-on-year increase. In the parallel market, both individual and institutional Saudi investors held stocks valued at SR54.33 billion, up 16.73% from the previous year. Additionally, stocks held by GCC investors in the parallel market surged by 26.85% year on year, totalling SR247.44 million by the end of September.

This surge in foreign investment not only reflects heightened investor confidence in Saudi Arabia’s economic prospects but also showcases the Kingdom’s efforts to diversify its economy away from oil dependency. The increased foreign interest in the stock market is a clear indicator that the government’s initiatives are resonating with investors, both domestic and international.

As Saudi Arabia continues to push forward with its Vision 2030 agenda, foreign investment will play a critical role in supporting the Kingdom’s economic transformation. The surge in foreign investments, coupled with the strong performance of local investors, paints a promising picture for the future of the Saudi stock market.