Tadawul to lure $40 bln inflows on entering EM Index: MSCI

The Saudi Stock Exchange (Tadawul) is expected to attract cash flows between $30 billion and $40 billion upon joining MSCI Emerging Markets Index, Robert Ansari, executive director, head of the Middle East at MSCI, told CNBC Arabia on Thursday.

The Saudi market’s weight will stand at 2.4 percent of the index.

Meanwhile, Ansari expected Tadawul’s weight to double to 5 percent, in case the Kingdom marches ahead with listing a 5 percent stake in major oil producer Saudi Aramco next year.

As many as 32 medium to large-size companies would join MSCI EM Index, of which the weight of Al Rajhi Bank and giant petrochemical producer SABIC would account for 28 percent.

At a sector level, the financial sector will represent 40 percent of the index total weight, followed by mining with a weight of up to 33 percent, driven by SABIC.

Ansari added that the average time for review and inclusion takes from three to four years, while the shortest time for inclusion into the index is one year.

Saudi Arabia was earlier this week added to MSCI watch list for emerging market status.