By Mohammed Abu Meleeh
Riyadh-Mubasher: The leading index provider MSCI Inc. said the potential inclusion of Saudi Stock Exchange (Tadawul) in the emerging markets index will lead to attracting billions of dollars.
Analysts expected that the kingdom will see up to $40 billion in additional inflows from funds that use these benchmarks after it is rated as an emerging market.
Saudi Arabia will open its $580 billion stock market to direct foreign investment on 15 June, allowing qualified foreign institutions to buy shares from that date.
The kingdom’s plan to give foreigners direct access to its market will help expand opportunities for global institutional investors but MSCI will only consider adding it to its emerging markets basket after gauging the effectiveness of the opening, the index compiler said.
MSCI welcomed the Saudi bourse opening, but it will consider a proposal to include Saudi Arabia in the emerging markets index only after assessing the “accessibility” and based on “feedback from international investors,” the indexer said in its annual market classification review late Tuesday.
Classification as an emerging market by index compilers such as MSCI is highly coveted, as these indexes are tracked globally by hundreds of billions of dollars.
Translated by Abdul Maguid Aboshahla
