Saudi Arabia is no longer just an oil-price bet for global investors. It is becoming a core emerging-market play. That is the view of Emmanuel Laurina, head of Middle East, Africa, and official institutions at State Street, one of the world’s major financial services and asset management firms.
Speaking to Asharq Al-Awsat, Laurina said a structural shift is reshaping how global institutions view the Kingdom, and why State Street is placing a major bet on its market.
Laurina explained that Saudi Arabia has moved from an oil-linked allocation to a central component of emerging-market portfolios.
The shift is being driven by a broader range of investable sectors, particularly finance, energy, and raw materials, giving investors real diversification in a world where many emerging markets are dominated by technology, he stressed.
Saudi Arabia’s inclusion in major global equity and bond indexes has helped anchor foreign inflows and strengthen the market’s role in international allocations, he said. Vision 2030 reforms have also widened opportunities beyond oil.
What is drawing investors now?
Laurina said market liberalization and the opening of share trading to foreign investors through the development of the Saudi Exchange, Tadawul, have helped attract liquidity and deepen international participation.
He also pointed to Saudi Arabia’s push into artificial intelligence and digital infrastructure as the Kingdom seeks strategic partnerships with major global technology companies.
In fixed income, Laurina said Saudi government bonds carry a strong A+ credit rating and offer a positive yield spread over US Treasuries, making them attractive for investors seeking dollar-denominated diversification.
Access has also improved sharply, he said. The abolition of the qualified foreign investor regime and the shift toward direct ownership of listed securities mark a major step forward.
Still, some structural limits remain. These include foreign ownership caps at individual and aggregate levels, and the need to trade through local brokers. Laurina said the listing of foreign exchange-traded funds in the Kingdom remains only partly developed because Saudi Arabia’s domestic market-making ecosystem is still limited.
New fund targets Saudi equities
Laurina said State Street recently launched an exchange-traded fund in partnership with the Saudi Public Investment Fund, giving international investors access to Saudi equities through a systematic active strategy that seeks to beat the benchmark across full market cycles.
The launch reflects rising client demand and a clear shift in the Saudi market’s composition, away from oil stocks and toward sectors such as healthcare, utilities and technology, he went to say.
ETFs, he said, are only one part of a wider ecosystem that includes institutional mandates, strategic partnerships, index-driven flows and growing activity in private markets, especially in Vision 2030 priority sectors.
Laurina said the Middle East and Africa are central to State Street’s future growth strategy.
The strategy rests on three pillars: building institutional asset classes in the Middle East and North Africa, internationalizing Sharia-compliant portfolios, and meeting growing demand for regionally focused investment solutions.
Riyadh became State Street’s 11th global investment center in 2024, he said, as the company continues to expand its local investment and research team.
Laurina said Saudi Arabia is now a pivotal market and a key growth engine in State Street’s Middle East and Africa strategy.