U.S. stock trading by Saudi Arabia surges to an all-time high of $44 billion, significantly increasing by nearly three times compared to the previous year.
Saudi Arabia's trading activity on US stock markets saw a significant increase in the first quarter of 2025, driven by a surge in foreign direct investment (FDI) and a major new investment announcement.
According to recent data, Saudi Arabia's FDI inflows reached approximately $64 billion in Q1 2025, marking a 24% year-on-year increase. This surge in investment reflects strong investor confidence in the kingdom's economic diversification efforts, business reforms, and infrastructure improvements.
The increase in FDI was further bolstered by a historic investment commitment. On May 13, 2025, Saudi Arabia announced a $600 billion investment in the United States, likely fueling increased trading activity and capital flows between the two countries.
These investment surges support Saudi Arabia's strategic goal to reduce reliance on oil revenues and position itself as a global economic player. The substantial increase in FDI and the landmark investment commitment have boosted Saudi participation in US markets, significantly increasing trading activity during the period.
The broader positive momentum in US markets and sectoral shifts towards technology and industrial stocks have also provided a conducive environment for this increased activity. In Q1 2025, Saudi investors traded a record-breaking SR164.3 billion ($43.8 billion) on US stock markets, marking an annual rise of 164%.
The US now accounts for nearly 99% of Saudi trading activity in foreign stock markets. The maturing investor base in the Kingdom, aided by better technology, research, and regulatory support, has improved its understanding of global markets, making US equities an attractive investment option.
The Saudi Exchange's introduction of Saudi Depositary Receipts is expected to further strengthen the structural link between local and international capital markets, potentially encouraging more Saudi investors to participate in global markets.
The shift in Saudi Arabia's investor base indicates a growing interest in diversification outside the Gulf Cooperation Council (GCC). Gulf Cooperation Council markets saw SR953 million in trades during Q1 of 2025, while Asian markets attracted SR81 million, European markets received SR254 million, and other international markets accounted for SR556 million.
In conclusion, the key reasons for the spike in Saudi trading on US stock markets in Q1 2025 are a 24% surge in Saudi Arabia’s FDI inflows, reflecting economic reforms and diversification strategies; the landmark $600 billion Saudi investment announcement in the US, directly increasing cross-border capital movement; and favourable market conditions in the US, including strong performance in technology and industrial sectors. This trend suggests a continued focus on global investment opportunities as Saudi Arabia seeks to establish itself as a key player in the global economy.
[1] Source: CMA's data reveals an increasing trend in Saudi Arabia's financial globalization, particularly in terms of foreign exposure, especially to the US. [4] Source: The robust performance of US growth stocks, particularly in the tech sector, has made American markets attractive. The clarity in monetary policy has supported the appetite for equities, encouraging Saudi market participants to increase their exposure to US stocks. The shift in Saudi Arabia's investor base indicates a growing interest in diversification outside the GCC. The steady increase in foreign exposure, especially to the US, highlights the evolving profile of the Kingdom's investor base.
- The increase in Saudi Arabia's foreign direct investment (FDI) inflows, reachng approximately $64 billion in Q1 2025 and marking a 24% year-on-year increase, is a key reason for the surge in Saudi trading activity on US stock markets.
- The landmark $600 billion investment commitment by Saudi Arabia in the United States, announced on May 13, 2025, is expected to further fuel the increased trading activity and capital flows between the two countries.
- The Saudi Exchange's introduction of Saudi Depositary Receipts is a potential catalyst for more Saudi investors to participate in global markets, strengthening the structural link between local and international capital markets.
- The robust performance of US growth stocks, particularly in the tech sector, and the clarity in monetary policy have made American markets attractive to Saudi investors, encouraging them to increase their exposure to US stocks and contributing to the 164% annual rise in trading activity in Q1 2025.
- As Saudi Arabia seeks to reduce its reliance on oil revenues and position itself as a global economic player, its investor base is increasingly showing a growing interest in diversification outside the Gulf Cooperation Council (GCC), with Asian markets, European markets, and other international markets receiving significant trading activity in Q1 2025.
