Saudi Arabian equities advanced notably in recent trading as investors positioned themselves ahead of a major regulatory shift that will allow all foreign investors to directly access the Kingdom’s capital markets from February 1, marking a significant liberalisation of the Tadawul All Share Index.

The rally was led by gains in key financial and consumer sectors, with the Saudi Tadawul Group’s stock at one point reaching its upper daily trading limit amid heightened buying interest.

The optimism follows a decision by the Saudi Capital Market Authority to abolish the Qualified Foreign Investor regime and eliminate related swap agreement frameworks, enabling individuals and institutions globally to buy and sell listed securities on the Main Market without meeting previous eligibility thresholds.

Market participants said the reform is expected to broaden the investor base, improve liquidity and support trading volumes, aligning with broader efforts to integrate Saudi Arabia more deeply into global financial markets as part of the country’s economic diversification strategy.

By the end of the third quarter of 2025, non-resident investor holdings in the Saudi capital market had already exceeded 590 billion riyals, with approximately 519 billion riyals invested in the Main Market, underscoring growing international interest even before the full opening takes effect.

Investor interest has propelled broad gains across the exchange, with Tadawul benchmarks posting some of their strongest advances in recent sessions as anticipation builds for the regulatory change.

Analysts said the removal of direct access barriers could unlock billions of dollars of new inflows over time and support valuation growth in sectors aligned with strategic priorities, including banking, petrochemicals and technology.

However, some market watchers caution that while the opening is a positive step, the immediate impact may be moderate as many institutional investors already had access through previous reforms and the full effects of expanded participation will take time to materialise.

Despite such caveats, the latest market movements reflect confidence in the Kingdom’s ongoing reforms and the expectation that deeper foreign engagement will bolster the attractiveness of Saudi equities to global capital.

As the Tadawul prepares to implement the new regime on February 1, investors across the region will be watching closely for shifts in trading patterns and asset flows that could reshape the landscape of Middle Eastern financial markets.