Saudi trading in US stocks hits record high

• Domestic trading muted
• Europe and Asia activity up
• Saudi stock index down 11%

Saudi Arabian investors are increasing their exposure to foreign stock markets. 

The value of trades in US equities has hit a three-year high and activity on European and Asian bourses is also rising, official data shows.

Nearly $58 billion of US equities were traded through Saudi brokerages and other domestic licensed institutions in the three months to September 30, according to data from the kingdom’s market regulator.

That is up from $52 billion in the preceding three months, more than double the value of trading in the prior-year period and the highest since at least late 2022, a Capital Market Authority (CMA) report shows.

The CMA data does not break down trading into investor categories such as individuals or institutions and excludes trading conducted via foreign brokerages or platforms.

Nevertheless, the report showcases how Saudi investors have increased their exposure to both US markets and also those in Europe and Asia while trading less at home and other Middle East markets.

Domestic trading of Saudi stocks totalled $175 billion in the third quarter, almost unchanged versus the second quarter which was lowest since early 2023.

Saudi Arabia’s stock index is down nearly 11 percent this year due to worries about how subdued oil prices will crimp the country’s ambitious economic diversification plans. A late September rally – sparked by expectations that foreign ownership restrictions would be loosened – soon gave way to a renewed slump.

Domestic investors have offloaded Saudi stocks to put their money in better-yielding assets such as foreign equities, Saudi sovereign and quasi-sovereign debt and real estate, plus cash savings accounts.

Further reading:

• PIF slashes exposure to US stocks in third quarter
• US pivot to state capitalism sends a dangerous signal to Gulf
• US executives flock to Riyadh for ‘must do’ FII

The US S&P 500 stock index is up 14 percent this year and hit an all-time high in late October.

Saudi third-quarter trading of European stocks totalled $434 million, a tenfold increase on the second quarter and the second-highest quarterly total since late 2022. Asian stock trading was also the second highest on record at $43 million.

Saudi investors reduced their trading of GCC stocks, which fell to a milestone low of $183 million in the third quarter, down by more than two-thirds versus the preceding three months.