New Delhi

In a historic move, Saudi Arabia's Capital Market Authority (CMA) has allowed foreigners to invest in Saudi-listed real estate companies in Makkah and Madinah, the holy cities where the entry of non-Muslims was banned till a few years ago.

The decision comes from Saudi Arabia's Vision 2030 for promoting economic diversification and the real estate sector.

The CMA has announced that foreign investors can now invest in Saudi-listed companies owning real estate in Makkah and Madinah.

However, this investment will be limited only to shares of companies and convertible debt instruments. The maximum ownership in the shares of any company by foreign investors will be limited to 49%.

The decision is aimed at encouraging foreign investment and strengthening the competitiveness of Saudi Arabia's capital market. Strategic foreign investors are not allowed to hold stakes in these companies.

Following the CMA announcement, share prices of real estate companies listed on the Saudi Arabian Stock Exchange saw a massive surge. Knowledge Economic City's share price rose 9.89% to SR16.66 ($4.44). Jabal Omar Development Company's shares rose 10% to SR25.85.

The move opens new avenues for foreign investors in Makkah and Madinah, which will not only be beneficial for the Saudi economy but will also enhance the reputation of the Saudi market regionally and internationally.

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The initiative could prove to be a milestone in attracting foreign capital and playing a key role in major projects of Makkah and Madinah. Saudi Arabia's decision has been taken to take the country's economy to new heights, which will establish it as a strong and diversified economic power.