Saudi Arabia joined the MSCI Emerging Markets Index after it was put under monitoring for a possible upgrade last June. This follows the Kingdom's accession to the FTSE Russell Index in last March.
This decision will make the Saudi market available to major international investors, to be placed in the ranks of other markets such as China and South Korea. The Saudi market's entry into the MSCI Emerging Markets Index will also make it possible for global funds which follows the index and manage assets of $ 1.9 trillion.
Experts estimate that the upgrade of “Tadawul” Saudi stock market will bring about $ 20 billion in flows into the Saudi market.
Saudi Arabia's entry into the Morgan Stanley Emerging Markets Index will be in two phases next year - the first in May and the second in August. The Saudi index will weigh 2.6% of the MSCI Emerging Markets Index, represented by 32 companies.
It should be noted that the promotion of the Saudi market came after a series of reforms to promote the market, most notably raising the percentage of foreign ownership to 49%, and facilitate the conditions of granting licenses to qualified investors. The MSCI Emerging Markets Index was launched in 1988 with only 10 markets, before becoming one of the most important indices for all stock markets to join.