Saudi Arabia and Bahrain: Investment Partnership Impact on Financial Market

The Saudi Bahraini Investment Company (SBIC) is a strategic investment entity established to deepen economic cooperation between the Kingdom of Saudi Arabia and the Kingdom of Bahrain. SBIC is wholly owned by the Saudi Public Investment Fund (PIF) and acts as an investment arm to support joint developmental projects in vital sectors for Bahrain, while enhancing Gulf economic integration. The company was established in response to the requirements of Saudi Vision 2030 and Bahrain's efforts to attract foreign investments. It is not a publicly traded joint-stock company listed on the Saudi stock market but operates within the sovereign investment sector. Through SBIC, preparations are underway to launch investment programs, develop infrastructure, and implement technology projects, focusing on knowledge transfer and expanding Gulf markets. The company's role extends beyond injecting capital; it aims to build long-term partnerships with Bahraini government institutions, particularly the Bahrain Mumtalakat Holding Company, reflecting a strategic government approach to support sustainable development.

The Saudi Bahraini Investment Company (SBIC) is 100% owned by the Saudi Public Investment Fund (PIF), which is one of the largest sovereign funds in the world. This full ownership grants SBIC a sovereign status, as it is managed directly according to PIF's directives and vision for diversifying the Saudi economy and supporting regional projects. No Bahraini entity holds an official stake in SBIC; rather, cooperation with the Bahraini side occurs through strategic partnership agreements with entities such as the Bahrain Mumtalakat Holding Company. The company's senior management is characterized by institutional transparency, overseen by a board of directors appointed by the Saudi sovereign fund, with the involvement of experts from various investment sectors. This management model ensures that investments are directed towards sectors that align with the goals of Vision 2030 while maintaining flexibility and the ability to explore new opportunities in the Bahraini market.

The Saudi Bahraini Investment Company (SBIC) is not a publicly traded company, and therefore its shares are not traded on the Saudi stock market "Tadawul". Its establishment came as a governmental investment tool aimed at enhancing economic cooperation outside the framework of public markets. This means that traditional financial data such as share price, market capitalization, or price-to-earnings ratio are not available, and it is not included in Saudi market indices. However, SBIC's operations may indirectly affect some listed sectors in the market through its projects or partnerships with listed Saudi companies. All details of financial and administrative performance remain within the reports of the Public Investment Fund and are not publicly disclosed separately.

Economic relations between Saudi Arabia and Bahrain are witnessing accelerated growth, supported by significant mutual investments. As of 2023, Saudi investments in Bahrain were estimated in the tens of billions of riyals, with approximately 1,550 Saudi companies registered in Bahrain and over 700 Bahraini companies operating in the Kingdom. These figures clearly indicate the depth of economic ties, as Saudi Arabia invests in various sectors within Bahrain, including infrastructure, banking, logistics, and tourism. In turn, Bahrain seeks to attract Saudi investments by providing a developed and flexible business environment. With the establishment of SBIC and the activation of new agreements in 2024–2025, mutual investment volumes are expected to continue to grow, especially in light of the supportive regulatory frameworks from both governments.

The Saudi Bahraini Investment Company (SBIC) targets strategic sectors in Bahrain that align with the economic diversification trends of both countries. Among the most important of these sectors are: infrastructure, logistics services, renewable energy, digital technology, and health and entertainment tourism. These investments aim to enhance sustainable growth, technology transfer, and create new job opportunities. SBIC also focuses on supporting digital transformation and Islamic finance, in line with Bahrain's priorities for economic transformation. The selection of these sectors came after joint analytical studies and represents a fundamental pillar in achieving the goals of Saudi Vision 2030 and Bahrain's economic vision. These initiatives are expected to create opportunities for integration between Saudi and Bahraini companies and contribute to enhancing the efficiency of regional supply chains.

At the end of 2025, an important memorandum of understanding was signed between the Saudi Bahraini Investment Company (SBIC) and Bahrain Mumtalakat Holding Company, aimed at launching a joint investment program in strategic sectors in the Bahraini market. This step comes within the framework of the Saudi-Bahraini Coordination Council and reflects the two countries' commitment to building long-term partnerships. The agreement focuses on injecting capital into infrastructure projects, clean energy, and technical services, while encouraging knowledge transfer and developing local competencies. Additionally, this partnership paves the way for the potential establishment of joint investment funds in the future and enhances Bahrain's position as a regional financial hub. Such agreements reaffirm the commitment of both countries to expand economic cooperation in a way that serves the interests of investors and Gulf institutions.

The Saudi Bahraini Investment Company (SBIC) plays a pivotal role in achieving the goals of Saudi Vision 2030, particularly in diversifying income sources and enhancing regional investments. Through its investments in Bahrain, SBIC supports the Kingdom's efforts to expand Saudi capital beyond borders, focusing on vital and innovative sectors. It also contributes to building partnerships with Gulf institutions, enhancing economic integration, and providing opportunities for technology transfer and developing national competencies. SBIC represents a model of cooperation between the sovereign sector and regional institutions, striving to establish Saudi Arabia as an investment powerhouse in the Gulf and the Arab world.

SBIC cannot be described as a traditional competitor to commercial companies, as it is a government investment tool with a sovereign nature. However, there are major Saudi entities operating in the same strategic fields, such as Saudi Aramco in the energy sector, Saudi Telecom Company (STC) in the technology sector, and major banks like the National Commercial Bank in the financial sector. Additionally, SBIC competes with other government investment funds (such as the Saudi Fund for Development) and major real estate and contracting companies in infrastructure projects. Nevertheless, SBIC often tends toward partnership with these entities rather than direct competition, to enhance Gulf economic integration and achieve common developmental goals.

So far, there is no direct link or shared trading platform between the Saudi financial market (Tadawul) and the Bahrain Stock Exchange. However, cooperation between the two countries at the level of financial policies and joint investments is on the rise, with increasing interest in the possibility of opening new channels for information exchange and investment opportunities. Saudi companies registered in Bahrain and Bahraini companies operating in the Kingdom remain indicators of economic integration. Partnerships like SBIC may contribute in the future to pushing towards technological solutions or shared financial indicators between the two markets, especially in light of evolving regulations and the directions of regulatory bodies.

The years 2024 and 2025 were marked by an increase in the pace of economic cooperation between Saudi Arabia and Bahrain. Key events included the signing of the SBIC agreement with Bahrain Mumtalakat in December 2025 to launch a joint investment program, in addition to holding economic forums that discussed material transfer projects and facilitating cross-border investment. This period also witnessed intensive ministerial meetings to follow up on project implementation and develop joint initiatives. This surge in activity reflects official interest in promoting economic integration, with positive indicators regarding the increase in mutual investment volumes and expansion into vital sectors.

SBIC's activity falls within the sovereign investment sector, which differs from traditional investment companies or commercial banks. The company focuses on investing in long-term strategic projects aimed at sustainable development, away from achieving short-term profits. This sector faces competition from regional sovereign funds, but it is characterized by a significant ability to mobilize capital and direct it towards projects with broad economic and social impact. Additionally, SBIC's focus on future sectors (such as clean energy and technology) reflects the dynamism of the sovereign sector in keeping pace with global changes.

Although SBIC is not listed on the Saudi stock market, its investment activity may indirectly affect some listed Saudi companies, especially if it enters into partnerships or joint projects. For example, energy, technology, or infrastructure companies may benefit from SBIC's entry as a funder or strategic partner in Bahraini projects. This indirect impact enhances the position of Saudi companies regionally and provides them with new opportunities for growth and expansion outside the local market.

As SBIC is wholly owned by the Public Investment Fund and not listed on the market, it does not issue detailed or periodic financial reports to the public. Its results are typically included in the consolidated reports of the sovereign fund, and there is no public data available on the company's profits or revenues separately. This limits the application of traditional financial analysis standards used by investors to evaluate listed companies. However, the company is committed to official disclosures when signing agreements or launching major initiatives and ensures that regulatory authorities are provided with the necessary information in accordance with applicable regulations.

The investment partnership between Saudi Arabia and Bahrain through SBIC faces several challenges, the most prominent of which are the need to coordinate financial policies, differences in the regulatory environment between the two countries, and the necessity of enhancing transparency in joint projects. On the other hand, this partnership provides significant opportunities for developing vital sectors, technology transfer, and market expansion. With continued support from both governments and positive developments in the investment environment, growth opportunities are expected to increase, especially if the partnership is expanded to include investment funds or joint financial instruments in the future.