Global investors explore deeper diversification in Saudi Arabia as tariff uncertainty persists

Over 300 global institutional investors met with all seven bourses from the Gulf Cooperation Council (GCC) and over 100 GCC corporates at HSBC’s GCC Exchanges Conference in London this week. The event comes as global economic uncertainty reshapes capital flows, with global investors exploring new opportunities in the Gulf for long-term, reform-driven growth, and maturing capital markets.

Now in its fourth year, the Conference focused on the region’s resilience. Saudi Arabia was a main feature of the first two days of the Conference, where guest speakers included His Excellency Khalid bin Abdulaziz Al-Falih, Minister of Investment of Saudi Arabia and Raed Alrashed Alhumaid, Deputy Market Institutions, Capital Market Authority (CMA), Saudi Arabia.

Having registered a 3.4% YoY1 increase in GDP in Q1, Saudi Arabia’s non-oil growth is tracking ahead of already strong initial estimates. Discussions focused on plans for the Kingdom’s services and non-oil manufacturing sectors, as well as efforts to continue liberalizing financial market infrastructure.

Faris AlGhannam, Chief Executive Officer and Board Member, HSBC Saudi Arabia: “The resilient activity in Saudi Arabia’s private and public markets, as well as the breadth of sectors coming to market, is a reflection of investor’s confidence in the Kingdom’s long-term potential despite testing markets.”

Mohammed Al-Rumaih, Chief Executive Officer, Saudi Exchange, said: “The global investor appetite for the Saudi capital market continues to deepen, driven by the Kingdom’s ongoing economic transformation. At the Saudi Exchange, we remain committed to enabling access, enhancing market infrastructure, and fostering transparency to support diversified capital formation across sectors. The strong engagement witnessed this year at the GCC Exchanges Conference further reflects the growing international confidence in the Saudi market and its central role in the Kingdom’s national transformation roadmap.”

Although domestic market liquidity and oil-dependency have been traditional constraints for equity investors, HSBC analysts predict that the combination of IPOs and secondary listings from the Kingdom as well as the removal of foreign ownership limits could lift Saudi Arabia’s weight in emerging market benchmarks.

Saudi Arabia led listing activity in the region during the first quarter, despite a slowdown in issuances globally, with 12 IPOs across sectors such as real estate healthcare, financial services, and retail.2

Mr AlGhannam continued: “Global investors are recalibrating for resilience and the GCC’s balance sheet strength and sophisticated financial markets ecosystem make it a capital magnet.”

This year, for the first time, HSBC brought together Emerging Market Macro Strategists with GCC attendees, as EM investors dial-up their exposure to the Gulf’s capital markets driven by strong GDP projections relative to the broader EM pool.

1 HSBC Global Investment Research: Economics - Saudi Arabia, 10 June 2025

2 Ernst & Young, MENA region saw 14 IPOs valued at US$2.1b in Q1 2025, 06 May 2025