We are now in the final four years of Saudi Arabia's Vision 2030, the economic transformation plan that Crown Prince Mohammed bin Salman launched in 2016 with a goal of diversifying the Saudi economy away from oil by the end of this decade. A lot of the early Vision 2030 coverage was either breathless optimism or reflexive skepticism. Neither aged particularly well. Now that we are close enough to the finish line to actually judge what happened, it is worth taking an honest look at what Saudi public markets look like in 2026 and what it means for halal investors who want exposure to the Gulf.

Short version: Vision 2030 did not accomplish what it set out to accomplish, but it accomplished something else that might actually matter more for public market investors. Let me explain.

What Vision 2030 promised versus what it delivered

The original Vision 2030 targets that were most relevant for public market investors were these. Increase non-oil revenues from about $43 billion to about $267 billion annually. Raise the private sector contribution to GDP from 40 percent to 65 percent. Grow foreign direct investment from 3.8 percent of GDP to 5.7 percent. Increase female labor force participation from 22 percent to 30 percent. Deepen and broaden the Saudi stock market, with a target of the Tadawul becoming a top-tier global equity market.

Here is what actually happened as of the end of 2025. Non-oil revenues grew to about $152 billion, which is a big improvement but well short of the target. The private sector contribution to GDP reached about 48 percent, also an improvement but short of the 65 percent target. Foreign direct investment is at about 2.9 percent of GDP, which is worse than the 2016 baseline. Female labor force participation exceeded the target and is now around 34 percent, which is a genuine success. And the Tadawul has roughly tripled in market cap over the last decade to about $3 trillion, making it the 9th largest equity market in the world.

So on the main macroeconomic goals, Vision 2030 is a partial success at best. Oil still accounts for roughly 38 percent of Saudi GDP, down from 44 percent in 2016. That is progress but it is not transformation. The private sector growth is real but most of it came from government contracts and infrastructure spending, not from the kind of organic private enterprise growth the plan envisioned.

But here is the thing. From a public equity investor's perspective, the headline goals are not really what mattered. What mattered was whether the Tadawul became an investable market with enough depth, liquidity, and quality issuers to warrant meaningful portfolio allocations. And on that dimension, Vision 2030 was more successful than most people acknowledge.

What actually happened in Saudi public markets

The Tadawul entered 2016 with about 170 listed companies and a total market cap of around $400 billion. By the end of 2025 it had 294 listed companies and a market cap of roughly $3 trillion. That is a massive expansion. Some of it is driven by Aramco, which listed in December 2019 and single-handedly accounts for about $1.8 trillion of the current market cap. But even excluding Aramco, the Tadawul has grown from about $400 billion to $1.2 trillion over the period, which is a 3x increase.

More importantly, the composition of the Tadawul has shifted in ways that actually matter for long-term investors. In 2016 about 62 percent of Tadawul market cap was concentrated in financials, mostly banks. Today that is down to about 38 percent, with the rest spread across energy (26 percent), materials (9 percent), telecom (7 percent), consumer (6 percent), and various smaller sectors. That diversification is healthy and gives you something closer to a real sector-diversified equity market.

Sector breadth also improved through a series of large IPOs and spin-offs. Saudi Telecom sold down minority stakes in multiple subsidiaries. Aramco spun off its base oils division. ACWA Power listed. Nahdi Medical listed and became a major healthcare benchmark. Solutions by STC listed and became one of the larger tech names. Tadawul Group itself listed, which was a nice bit of financial engineering. Multiple consumer and retail names came to market. For the first time, you could actually build a balanced Saudi equity portfolio without being 60 percent banks.

Why this matters specifically for halal investors

Saudi Arabia is unique for halal investors because effectively the entire Tadawul is screened for Shariah compliance at the regulatory level. That is not quite true in the strict sense but it is close enough that most Tadawul companies either comply with standard AAOIFI financial ratio criteria or are close enough to pass with minor adjustments.

For comparison, in the US market, roughly 40 to 50 percent of the S&P 500 passes Shariah screening depending on methodology. In the Tadawul, the number is somewhere between 85 and 92 percent. That means a Saudi equity allocation gives you way more investable companies per dollar of market cap than almost any other market in the world. For halal investors, this is a big deal.

The problem until recently was that you had to either invest directly through a Saudi brokerage (hard for retail investors outside the Gulf), through a QFI license (impractical for retail), or through a handful of Gulf-focused ETFs that had very low AUM and wide spreads. The infrastructure was not good enough to support meaningful portfolio allocations.

That has changed over the last three years. Several large Islamic ETFs now include significant Saudi equity exposure. The iShares MSCI Saudi Arabia ETF has grown from about $200 million in AUM to over $1.2 billion. The Franklin FTSE Saudi Arabia ETF launched in 2022 and has about $400 million. BlackRock's Shariah ETF launch in 2025 (which I have a separate post about) includes Saudi names as a meaningful portion of the portfolio. The net effect is that a retail halal investor in 2026 can get Saudi equity exposure through a normal brokerage account for reasonable expense ratios, which was essentially impossible five years ago.

What I actually think about the investment case

I want to be honest about what I think the Saudi public equity story looks like from here.

The bull case is straightforward. The Saudi economy is growing faster than most developed markets. The population is young and urbanizing. Consumer spending per capita is rising. Government infrastructure spending is going to continue through 2030 and probably beyond. And the market is still cheap on most multiples relative to its growth rate. Forward P/E on the Tadawul ex-Aramco is around 14x, which is not expensive given nominal GDP growth in the high single digits.

The bear case is also real. Oil prices are the single biggest driver of the Saudi economy and they are volatile. The government is running material fiscal deficits that are eventually going to require either spending cuts or meaningful tax increases. The concentration of political power in a single decision-maker creates tail risk that is hard to price. And foreign investor access, while much better than it used to be, is still subject to regulatory uncertainty.

My honest take is that Saudi equities deserve a small overweight in a halal global portfolio, maybe 4 to 7 percent, but I would not go bigger than that. The market is deep enough to be investable but not so deep that you want it dominating your allocation. And I would access it through broad Saudi or Gulf ETFs rather than individual stock picking, because the research coverage on individual Saudi companies is still spotty compared to developed market standards.

The next five years of Vision 2030 and what to watch

The final four years of Vision 2030 are going to look different from the first eight. The early phase was about big-ticket initiatives (NEOM, Red Sea Project, Riyadh Metro) and headline goals. The final phase is going to be about operational execution, which is less exciting but arguably more important.

Three things I am watching closely.

First, what happens to the private sector as the government pulls back on infrastructure spending. The Saudi private sector is heavily dependent on government contracts, and the transition to a more self-sustaining private economy is the single biggest unanswered question about Vision 2030. If the private sector can sustain its growth without continuous government stimulus, Vision 2030 will be judged a success. If it cannot, we will look back on 2016 to 2030 as a well-intentioned experiment that did not quite work.

Second, whether the Public Investment Fund continues to be the dominant market maker in Saudi equities. PIF directly or indirectly owns meaningful stakes in most large Tadawul companies. That has been a stabilizing force but it also distorts price discovery. As PIF diversifies internationally, its Saudi holdings may become a smaller part of its overall portfolio, which could create interesting supply and demand dynamics in domestic equities.

Third, what happens with the next wave of IPOs. There are multiple large Saudi companies in the pipeline for IPO between 2026 and 2028, including potentially Saudi Arabian Military Industries, the Saudi Railways Company, and another potential Aramco secondary offering. Each of these would add meaningful depth to the market and could either validate or strain current valuations.

Bottom line for halal investors in 2026

If you are building a halal portfolio today, Saudi equities should be a small but real part of it. The infrastructure is finally good enough to support the allocation. The sector composition is finally diversified enough to be sensible. And the Vision 2030 transformation, while imperfect, did produce a deeper and better equity market than existed in 2016.

The five-year update on Vision 2030 is basically this: it did not do everything it promised, but it did do something that matters a lot. It turned Saudi Arabia into a real public equity market. For halal investors who spent decades without good access to Gulf public equities, that is a meaningful improvement in the opportunity set. Take advantage of it.

Saudi Vision 2030 and Public Stock Investing: A Five-Year Update