​​Objectives of Opening the Saudi Stock Market for Foreign Investment

Opening  the  Saudi  Stock  Market  and  allowing  qualified foreign  financial  institutions  to  invest  in  it  does  not  focus on attracting capital or liquidity to the market. However, it aims  to  achieve  several  objectives  on  the  short  and  long term as following:

  1. Promote CMA’s efforts to increase institutional investment in the Saudi Capital Market which would contribute to market stability and reduce high volatility in prices through attracting the expertise of specialized foreign investors, with long term investment goals in the local market.
  2. Transfer  the  knowledge  and  expertise  to  the  local  investors  and financial  institutions  and  to  raise  the  level  of  professionalism  of  the market participants by attracting highly professional experts.
  3. Enhance the market efficiency and motivate the listed companies and the specialized investment companies to raise their performance by improving  the  level  of  transparency,  financial  information  disclosure and governance practices.
  4. Strengthen the Saudi Capital market’s position to become a leading market. In addition to increase the opportunities of raising its rating to  be  classified  as  an  emerging  market  under  the  global  indices,  led by  Morgan  Stanley  Capital  International  (MSCI)  index  which  many  markets seek to be part of.
  5. Raise the level of research, studies and evaluation done on the market in general and on listed companies in particular which would provide more accurate information and more fair assessments.