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The Arab world’s biggest bourse, Saudi Arabia’s Tadawul exchange, third phase of inclusion in FTSE Russell’s emerging market index is set to attract about $1.58 billion (Dh5.8bn) in passive foreign inflows. KSA joined the MSCI Emerging Market benchmark last year.

Saudi Arabia Stocks

The Tadawul’s inclusion is being completed in five phases.

The third phase for Saudi Arabia is seen to attract $1.58bn in investments when Saudi Arabia will start receiving inflows into its equities from June 20. Saudi equities are expected to attract as much as $7bn in total investments once all are phased in. 

First Abu Dhabi Bank, the largest bank by assets in the UAE, will be the second biggest Mena trade, attracting about $225 million from passive institutional investorsm EFG Hermesm told clients on Saturday. The Kingdom of Saudi Arabia’s equities will have a 2.9 per cent weighting in the FTSE Emerging All Cap Index once all the five inclusion phases in the benchmark gauge are complete by March 2020. FTSE Russell’s chief executive, Waqas Samad told The National in March this could attract as much as $7bn.

Saudi Arabia’s stock exchange undertook reforms to earn the inclusion to the FTSE Index, as well as the S&P Dow Jones Indices.

MSCI Emerging Market Index

Last year the Tadawl won inclusion in the MSCI Emerging Market benchmark in June last year. This inclusion allows for an estimated $40bn of additional inflows to the kingdom’s half-a-trillion-dollar stock market. The phased inclusion of Saudi Arabia gives the kingdom’s stocks a representative weighting on a pro forma basis of approximately 2.6 per cent of the index with 32 securities, MSCI said.

MSCI will also announce its decision on potentially upgrading Kuwait to its emerging market classification next month, it said last week.

Kuwait’s bourse and Saudi Tadawul are the best-performing exchanges in the region since the beginning of this year.

  • Kuwait’s benchmark equities index has risen close to 10 per cent
  • Saudi Tadawul All share index is up 9 per cent for the period.

Source: The National

From The TradersCommunity Research Desk

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