Saudi Arabia allows foreigners to invest in firms with property in Makkah, Madina

• Foreign investment to be limited to shares, says CMA.
• Non-Saudis won't be allowed to own more than 49% shares. 
• Market regulator to allow foreign investment in listed companies.

DUBAI: Saudi Arabia's market regulator said on Monday it would allow foreign investment in listed companies that own real estate within two holiest sites of Makkah and Madina, as the Gulf country looks to attract more investment.

The move will allow foreigners to invest in firms whose revenues rely on the pilgrimage, one of the top revenue sources for the oil-rich kingdom.

Saudi Arabia's market watchdog, the Capital Market Authority (CMA), said in a statement the move aimed to attract foreign capital and provide liquidity for present and future projects in the two cities.

Saudi Arabia has said it aims to welcome 30 million pilgrims for Hajj and the year-round pilgrimage Umrah annually by 2030. In 2019, it earned about $12 billion from the two pilgrimages, according to official data.

The annual pilgrimage plays a vital role in the country's economy and upping the number of pilgrims is an integral part of its Vision 2030 economic reform agenda that aims to wean the economy off oil revenues.

Saudi Arabia's benchmark index .TASI was up 0.2%, led by 10% increases in both Jabal Omar Development Company 4250.SE and Makkah Construction and Development Company 4100.SE, which have real estate in Makkah.

The bourse, the Gulf Arab region's largest with a market capitalisation of 10.2 trillion riyals ($2.72 trillion), opened up to foreign investors in 2015 in a bid to attract more funds and has seen a flurry of new listings in recent years.

The CMA said that under Monday's move foreign investment would be limited to shares, convertible debt instruments, or both, and would exclude "strategic foreign investors".

The watchdog added that people without Saudi nationality would not be allowed to own more than 49% of shares of the firms involved.

In 2021, it allowed non-Saudis to subscribe to real estate funds investing within the boundaries of Makkah and Madina.