Saudi Arabia’s Capital Market Authority (CMA) announced on Monday that it would permit foreign investments in listed companies owning real estate in Makkah and Madina, Islam’s two holiest cities. The decision is part of the Kingdom’s ongoing efforts to attract international investment and diversify its economy under its Vision 2030 reform agenda.
This move enables foreign investors to buy shares and convertible debt instruments in these companies, with a cap preventing non-Saudis from owning more than 49% of the shares. Strategic foreign investors, however, remain excluded from this opportunity.
The CMA emphasized that the policy aims to inject foreign capital and enhance liquidity for current and future projects in the two cities. These projects are vital for accommodating the Kingdom’s goal of hosting 30 million pilgrims annually by 2030.
In 2019, Saudi Arabia earned approximately $12 billion from the Haj and Umrah pilgrimages, a crucial source of revenue for the oil-dependent nation. Increasing the number of pilgrims aligns with Vision 2030’s objectives to diversify income sources and reduce reliance on oil revenues.
The announcement boosted investor confidence, with the Saudi benchmark index rising by 0.2%. Notably, shares of Jabal Omar Development Company and Makkah Construction and Development Company, both owning real estate in Makkah, saw a 10% surge.
Saudi Arabia’s stock exchange, the largest in the Gulf region with a market capitalization of 10.2 trillion riyals ($2.72 trillion), first opened to foreign investors in 2015. This decision represents another step toward attracting global investment and solidifying the Kingdom’s position as a global financial hub.
In 2021, Saudi Arabia began allowing non-Saudis to invest in real estate funds within Makkah and Madina, further signaling its commitment to economic reforms and international collaboration.
