[U.S.-Iran War Drags Down Saudi IPO, Foreign Capital Continues to Stay Away Due to Market Structure] According to a report by Golden Finance on June 11, citing Bloomberg, the initial public offering (IPO) of a Saudi company has been postponed, marking the latest setback for the Saudi stock market, which has underperformed its global peers for the fourth consecutive year. Due to the U.S.-Iran war, Mutlaq Al-Ghowairi Contracting Co. decided to delay its stock offering, which was originally expected to be the largest IPO in the Gulf region this year. This has further exacerbated the struggles of the Tadawul All-Share Index. Despite windfall gains from rising oil prices, the index has only risen about 5% year-to-date, slightly lagging behind the MSCI Global Benchmark Index. Although the Saudi government has been promoting increased investment in this $2.6 trillion market for years, foreign capital has consistently stayed away from Saudi stocks. A report from Bank of America shows that the Saudi stock market remains one of the lowest-weighted assets in emerging market funds. The U.S.-Iran war has heightened foreign investors' cautious sentiment, but there are other factors at play, the most significant being the market composition dominated by energy, petrochemical, and financial stocks. While soaring oil prices have boosted Saudi Aramco, the energy giant, and several other companies, emerging market investors have largely avoided companies with little connection to technology and artificial intelligence. In fact, Saudi stocks were already struggling before the conflict erupted. Since 2022, Saudi Arabia has faced persistent fiscal deficits, and the war has intensified these pressures. In the first quarter of 2026, the deficit more than doubled compared to the same period last year. To revive foreign capital inflows, Saudi authorities announced earlier this year that they would allow non-residents to directly invest in Saudi stocks, a key step toward expanding market access. However, they have yet to revisit regulations limiting foreign ownership of Saudi stocks. Wall Street banks predict that lifting the current 49% cap on foreign ownership could unlock $10 billion in new investments.