Sarah Al-Suhaimi, Chairwoman of Tadawul/Michael Nagle
The Kingdom’s inclusion in EM indices has generated foreign inflows worth billions of dollars since the start of the year and is expected to facilitate Saudi Arabia's plans to sell about five per cent of Saudi Aramco in an initial public listing (IPO).
Tuesday 10, September 2019 BY KUDAKWASHE MUZORIWA
The Chairwoman of Tadawul expects additional passive funds' inflows worth $3 billion from the remaining phases of inclusion in the FTSE Russell Emerging Market (EM) index starting in September.
Sarah al-Suhaimi, the Chairwoman of Tadawul, said that the Saudi Stock Exchange is also expected to launch the first exchange-traded derivative product—an index futures contract based on the MSCI Tadawul 30 Index—in the last quarter of 2019.
The Kingdom opened its stock market to foreign investors in 2015 and it has since introduced several reforms to make it attractive to foreign investors and issuers as well as to expand its institutional investor base, as part of Saudi Arabia’s ambitious plan to diversify the economy away from hydrocarbons.
Since the beginning of 2019, foreign investors have traded more than $65 billion and have been net buyers of more than $20 billion of Tadawul-listed shares through 29 August 29, said Suhaimi.
Additionally, the Chairwoman of Tadawul also said that the number of qualified foreign investors (QFIs) has grown exponentially by 200 per cent year-to-date, reaching more than 1,300 and is set to grow further by the end of this year.
The Saudi exchange completed the second and final phase of joining the MSCI Emerging Markets Index in August 2019, raising its weight on the closely monitored index to 2.8 per cent.
Inflows of foreign funds will help absorb the huge IPO, especially with an increasing likelihood of a domestic listing on the Saudi bourse followed by a later international offering, reported Reuters.