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Saudi Arabia’s Capital Market Authority said a review of rules that limit foreign ownership in local stocks is underway as the kingdom looks to open further to overseas investors.“FOL is under review,” said board member Abdulaziz Abdulmohsen Bin Hassan, referring to so-called foreign ownership limits that currently prevent overseas investors from holding majority stakes in local companies. “We are committed to make it happen and we hope it’s going to be happening this year.”The comments, made at the Capital Markets Forum Select in New York on Monday, indicate the regulator is proceeding with plans to lift the cap from 49% this year after months of uncertainty around the issue.Bin Hassan didn’t offer further clarity on next steps but the CMA has said that its review would include analysis of whether to completely remove foreign ownership limits or take a more gradual approach.A change in rules is perhaps the most closely-watched move for Saudi markets in 2026. A complete scrapping of the cap is something Wall Street firms from Goldman Sachs Group Inc to JPMorgan Chase & Co have said could unlock $10bn in fresh inflows for the Gulf nation.“Foreign capital is super important for Saudi Arabia and it’s very important to highlight where we were four or five years ago,” Nayef Al-Athel, chief sales and marketing officer at Saudi Tadawul Group Holding Co said in an interview to Bloomberg. “We were a local retail-driven market with about 80% of our investor base and liquidity coming from retail investors. And we’ve made a lot of efforts towards institutionalizing the Saudi Arabian market and today we are 50%-50% in terms of institutional and retail money and a lot of that institutional money is coming from foreign investors,” he added.“The majority of our clients are from the US and Europe, and we are starting to see some growth coming from the Asian investors, specifically Singapore, Hong Kong, China and Japan, Yazeed AlDomaiji, chief executive officer of Wamid, Saudi Tadawul Group’s technology innovation subsidiary said in an interview on the sidelines of Capital Markets Forum Select.Saudi Arabia’s move to liberalize its equity market is one of a recent flurry of reforms — including allowing all foreigners to directly trade local stocks — aimed at drawing more foreign direct investment to the kingdom. It’s also part of Crown Prince Mohammed bin Salman’s effort to create more robust financial markets that can help advance his $2tn agenda to diversify the economy away from oil.The Tadawul All Share Index rallied 8.5% in January, its best month since 2022, in part due to bullishness around the changes. The benchmark rose 1.4% on Monday. 

Saudi Arabia sharply revised up its 2024 foreign direct investment, with new data showing it attracted a near-record sum from overseas investors. The kingdom said FDI reached 119bn riyals ($31.7bn) last year, almost 37% more than it previously reported.That matched the 2022 level and was just shy of the record $32.5bn in 2021, according to official data. Saudi Arabia has yet to explain where the revision came from, but the new tally shows it surpassed its annual target for last year.It also suggests the kingdom is gaining ground in attracting foreign partners to support Crown Prince Mohammed bin Salman’s plans to diversify the economy. The need for inflows is growing as the government sustains high levels of spending while crude prices fall and oil export revenues weaken.Its goal is to draw in about $100bn annually, more than triple what it has ever done, by the end of the decade. “The fact that the inflow was again above target is positive,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank PJSC. “However, given the lower oil price, FDI inflows need to be significantly higher to support the transformation programme.” Last year’s inflows were driven by investments in manufacturing, wholesale and retail trade, and construction.Financial services and insurance also saw strong activity. The United Arab Emirates remained the leading source of foreign investments for a fourth year, while inflows from Germany and the US more than tripled from a year earlier. Hong Kong accounted for $2bn, a more than ten-fold increase from 2023.Flows from France and Spain slumped. Saudi Arabia sees foreign investment as key to training its young population, developing new industries and easing the government’s spending burden under the Vision 2030 economic transformation programme. FDI inflows amounted to $6.4bn in the first quarter of this year, according to preliminary data.