Tadawul prepares for investment boost due to index inclusion

Emerging_marketsSaudi Arabia’s stock exchange is readying itself for a sizeable investment boost in light of the inclusion of Saudi stocks on two of the world’s leading emerging market indices. The first of these indices, FTSE Emerging All Cap Index, began adding Saudi stocks on March 18, 2019, with an initial weighting of 2.9%. The MSCI Emerging Markets Index inclusion will begin in May. Tadawul chief executive Khalid al-Hussan believes that the FTSE index inclusion alone will attract $5 billion in passive fund flows, while the MSCI upgrade could bring in as much as $10 billion to $11 billion of passive fund flows. Hussain also stated that he expects the number of foreign investors to double from its current number of 730. The Tadawul is the largest stock exchange in the Mena region but foreign investors own just 5.9% of shares. However, since the beginning of the year, interest from foreign investors has been on the increase with more than $2.5 billion having been invested in the Saudi market so far this year, according to data provider Mubasher. ©2019 funds global mena

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