The Saudi capital market enjoyed a banner year in 2023, exceeding expectations and setting new annual benchmarks. Foreign investors flocked to the market, driving record levels of net foreign investment and propelling overall growth.
Net foreign investment reached a staggering SAR 198 billion (USD 53 billion) in 2023, marking a significant 7. 7% increase from the previous year. This surge in foreign participation underscores the growing confidence of international investors in the stability and potential of the Saudi market. As a result, the total ownership held by foreign investors climbed to SAR 401 billion (USD 107 billion) by the year's end, solidifying their presence within the market.
This robust foreign investment coincided with a remarkable increase in the number of offerings and listings. The market witnessed a staggering 43 new listings in 2023, surpassing the target set for the year by an impressive 79%. This surge in activity reflects the growing attractiveness of the Saudi market for domestic and international companies seeking to raise capital.
The Saudi government's ongoing economic reforms, collectively known as Vision 2030, are widely credited with contributing to the capital market's success. These reforms aim to diversify the Saudi economy away from its dependence on oil and foster long-term sustainable growth. Initiatives such as opening the market to foreign investors and streamlining regulatory processes have created a more attractive environment for businesses and investors alike.
The capital market's growth is not solely driven by foreign investment. Domestic participation also continues to flourish. The increasing awareness and financial literacy among Saudi citizens, coupled with a growing middle class, have fueled domestic investor activity. This trend is expected to continue in the coming years, further solidifying the market's foundation.
Looking ahead, the outlook for the Saudi capital market remains positive. The continued implementation of Vision 2030 reforms, coupled with a focus on innovation and attracting new asset classes, is likely to propel further growth. The market's ability to attract and retain foreign investment will be a crucial factor in its continued success. As the market matures and diversifies, it has the potential to become a major financial hub in the region and a significant player on the global stage.