Saudi Arabia’s market regulator has said it will let foreign money flow into firms that own homes in the holy spots of Mecca and Medina. This step is part of the nation’s plan to pull in more global funds.
The choice will let foreign buyers pick up shares in firms that earn cash from the Islamic trips, which are key for the rich kingdom. The Capital Market Authority (CMA) says this plan aims to draw in foreign cash and boost funds for both the work now and in the future in these holy towns.
Saudi Arabia hopes to host 30 million travellers each year by 2030 for both the Haj and the year-long Umrah trips. In 2019, the kingdom made about $12 billion from these pilgrimages, as shown by their data. The yearly trips are vital for the country’s money flow, and bringing in more travellers is a top part of the Vision 2030 plan, which seeks to cut the nation’s oil dependence.
After the news, Saudi Arabia’s stock market had a slight rise of 0.2%, driven by good gains in Jabal Omar Development Company and Makkah Construction and Development Company, both of which have real estate in Mecca.
The Saudi stock market, the biggest in the Gulf at a value of 10.2 trillion riyals ($2.72 trillion), opened to foreign investors in 2015. Since then, many new firms have joined as the country aims to spread its economy.
With the new rule, foreign money can come in as shares or bonds that can change to shares. But it won’t be open to “strategic foreign investors,” and those without Saudi nationality can own a maximum of 49% of shares in these firms.
In 2021, Saudi Arabia also let non-Saudis invest in real estate funds that focus on sites in Mecca and Medina.
