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Saudi Stock Exchange Joins MSCI Emerging Market Index
Traders Magazine Online News, June 26, 2018
The Saudi Stock Exchange (Tadawul) was upgraded to “Emerging Market” status from its previous “Standalone Market” status in the MSCI's Annual Market Classification Review. The Kingdom, which was also recently added to the FTSE Russell as a “Secondary Emerging” market in March 2018, will be included in MSCI’s Emerging Market Index in two phases concurring with the May 2019 Semi Annual Index Review and the August 2019 Quarterly Index Review.
In its decision, MSCI cited the further market enhancements introduced by Tadawul and the Kingdom’s Capital Market Authority (CMA) during the past year since being added to MSCI’s Emerging Market Index Watch List last June. Many of those developments have fulfilled criteria set by the MSCI Market Classification Framework that must be met in order for a market to be classified as Emerging Market in its indices. The Saudi Arabia Index, with 32 securities, is expected to have a weighting of 2.6 % within the MSCI Emerging Markets Index.
His Excellency Mohammed El-Kuwaiz, Chairman of the Capital Market Authority (CMA) commented:
“The inclusion decision shall enhance the diversity of the investors’ base as well as the liquidity of the Saudi Capital Market. We, at the CMA, will continue to further develop the Saudi Capital Market to ensure that the market facilitates investments, promotes confidence and protects investor and market participants.”
“Today’s announcement from MSCI, so close on the heels of KSA’s reclassification in the FTSE Russell Global Equity Index Series, marks the further integration of the Kingdom into global capital markets,” said Sarah Al Suhaimi, Chairperson of Tadawul. “It is the culmination of Tadawul’s ongoing efforts to work closely with Saudi regulatory authorities and leading emerging market investors to implement far-ranging reforms and market enhancements to strengthen the effectiveness of the Saudi capital market and foster an attractive investment climate for local and international investors. We are proud that these efforts have gained Saudi Arabia inclusion in the leading global indexes and benchmarks.”
“Inclusion in the MSCI Emerging Market Index is an important milestone and further affirmation of the tremendous progress Tadawul has made in the past year in broadening investor access to the Saudi capital market, enhancing market efficiency and further aligning market practices with global best practices,” said Khalid Al Hussan, Chief Executive Officer of Tadawul. “Our work is never done, and additional market enhancements are in the pipeline as we continue to strengthen and grow investor confidence in the Saudi market.”
The Road to MSCI Emerging Market Index Inclusion
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