Saudi Arabia’s equity market has seen significant changes over the last five years, especially after its inclusion in the MSCI Emerging Markets Index. This move has attracted foreign investors, with ownership by foreign investors quadrupling since the end of 2018. The market has also expanded its opportunity set, with the number of securities in the MSCI Saudi Arabia IMI increasing from 70 to 123.
Despite these positive developments, challenges remain, such as ownership restrictions and limited access for foreign investors. Efforts are being made to address these issues, including initiatives like the Qualified Foreign Investor program and the Capital Market Authority’s push to attract foreign investors.
Looking ahead, Vision 2030 and the Saudi Green Initiative are expected to shape the future trajectory of Saudi Arabia’s economy. These ambitious programs aim to boost development in various industries and reduce the economy’s reliance on oil. Additionally, the Saudi Green Initiative includes a target to reduce emissions by 2030, aligning with global climate targets.
While progress has been made in attracting foreign investors and expanding the equity market, there is still room for improvement. The government’s initiatives and commitment to sustainability are positive steps in the right direction. By continuing to focus on attracting foreign investment and promoting sustainable practices, Saudi Arabia’s equity market can further grow and contribute to the kingdom’s economic development.