African investors gear up as Saudi Arabia opens stock market to foreigners

African and global investors are recalibrating their strategies after Saudi Arabia announced it will open its stock market to all categories of foreign investors from February 1, a landmark reform that lifted sentiment across Gulf equities and underscored the kingdom’s push to deepen capital market participation.

• Saudi Arabia has announced it will open its stock market to all foreign investors from February 1, scrapping long-standing restrictions on access.
• The decision sparked a strong rally on the Saudi exchange and lifted broader Gulf markets.
• Foreign holdings of Saudi equities have climbed to about $157 billion, highlighting rising global interest.
• African investors are closely watching the reform for new diversification and capital flow opportunities.

Saudi Arabia’s benchmark Tadawul All Share Index rose as much as 2.5 percent during Wednesday’s session and closed 1.6 percent higher, its strongest intraday performance in more than three months.

The rally was broad-based, with banking, telecommunications, and consumer staples stocks leading gains.

Heavyweights Al Rajhi Bank advanced 3.4 percent, while Saudi National Bank climbed 5.9 percent. Shares of Saudi Tadawul Group, the exchange operator, jumped 5.2 percent, marking their sharpest rise since late September.

The gains followed a statement from the Capital Market Authority confirming that all foreign investors will be allowed to invest directly in the main market.

The regulator scrapped the long-standing Qualified Foreign Investor framework and removed rules that had previously limited access, a move widely seen as a turning point for the region’s largest bourse.

According to the CMA, the reforms are designed to broaden the investor base, support capital inflows, and improve liquidity. Foreign investors’ holdings in Saudi equities exceeded SAR590 billion by the end of the third quarter of 2025, equivalent to about USD157.3 billion, up from SAR498 billion, or roughly USD132.8 billion, at the end of 2024.

“The announcement lifted sentiment as investors viewed it as a move to broaden participation, improve liquidity, and support inflows,” said Milad Azar, a market analyst at XTB MENA.

He added that investors are still watching closely to see whether authorities will eventually lift the 49 percent cap on foreign ownership in listed companies.

Elsewhere in the Gulf, equity markets followed Saudi Arabia higher. Dubai’s benchmark index gained 1.1 percent to 6,249 points, its highest level since 2008. Emaar Properties rose 2.1 percent, while Air Arabia surged 4.6 percent.

Abu Dhabi’s main index added 0.5 percent, supported by healthcare, real estate, and financial stocks, with Aldar Properties up 1.5 percent and Abu Dhabi Islamic Bank rising 2.2 percent.

Qatar’s benchmark index advanced 0.7 percent, led by Qatar Islamic Bank and Qatar Aluminium Manufacturing. In Oman, the Muscat index climbed 1.2 percent, with Global Financial Investments Holding jumping 6.7 percent after state media reported plans to establish an international financial centre.

Beyond regional reforms, investors were also monitoring key US labour market data, including the JOLTS survey and ADP private payrolls report, ahead of the monthly jobs figures.

Markets have priced in two US Federal Reserve rate cuts this year, and any surprise could shift expectations.

For African investors, the Saudi move signals a deepening of ties between Middle Eastern capital markets and emerging economies, at a time when dollar-linked Gulf currencies mean US monetary policy continues to shape investment flows across the region.