Saudi trading in US stocks hits record $44bn, almost tripling year on year

09/07/2025 04:23 AST

Saudi investors posted record-breaking trading activity on US stock markets during the first quarter of 2025, reaching SR164.3 billion ($43.8 billion) - an annual rise of 164 percent.

According to newly released data from the Kingdom's Capital Market Authority, the US now accounts for the overwhelming majority of Saudi trading activity in foreign stock markets.

Out of SR166.2 billion in total foreign market trades during the first three months of the year, the North American country represented nearly 99 percent.

Gulf Cooperation Council markets saw just SR953 million in trades according to the CMA report, while Asian and European markets attracted SR81 million and SR254 million, respectively. Arab markets remained marginal at SR13 million, and other international markets accounted for SR556 million.

Robust performance by US growth stocks, particularly in the tech sector, has helped make American markets attractive after a somewhat sluggish 2022 and 2023.

By the first quarter, a group of US tech giants, dubbed the "Magnificent 7," had delivered impressive earnings and upbeat revenue forecasts, fueling a rally in their share prices according to a May post by WallStreet Horizon.

This coincided with a perception that the Federal Reserve was nearing the end of its tightening cycle; with the Fed keeping its benchmark rate unchanged around 4.25 percent to 4.5 percent during the quarter, and investors anticipated potential rate cuts later in 2025.

Clarity in monetary policy has removed some uncertainty and supported appetite for equities, encouraging Saudi market participants to increase their exposure to US stocks.

The investor base in the Kingdom has also matured in its understanding of global markets, aided by better technology, research, and regulatory support. This familiarity has reduced barriers to entry for trading abroad.

Trading activity on the local Saudi market reached SR730.6 billion during the same period, meaning that US equities alone represented nearly 18 percent of all Saudi institutional and individual equity trading across geographies.

The CMA's data revealed that Saudi engagement in US equities has more than doubled from its earlier peak of SR85.9 billion in the same period of 2022 and nearly tripled compared to the post-pandemic break observed in the first quarters of 2023 and 2024.

Saudi Exchange's recent introduction of Saudi Depositary Receipts, instruments that allow domestic investors to trade foreign shares in riyals, is expected to further strengthen the structural link between local and international capital markets.

The shift underscores the evolving profile of the Kingdom's investor base, particularly as more high-net-worth individuals, mutual funds, and institutional asset managers seek diversification outside the GCC.

While the local market still dominates in absolute volume, the steady increase in foreign exposure, especially to the US, highlights Saudi Arabia's accelerating financial globalization.