Saudi stocks top pick for Middle East funds, says poll

Middle Eastern funds are favoring Saudi and Kuwaiti stocks this year but remain "cautious" about other regional markets, according to Reuters poll.

Saudi Stock Exchange (Tadawul) is all set to join FTSE Russell's index in stages between March and December 2019 and MSCI's index in phases coinciding with reviews in May and August.

The entry to these indexes will help attract $15 billion inflow of passive funds, which will attract billions more of active funds, despite low oil prices and geopolitical issues.

According to the poll, two-thirds of the managers expect to raise their Saudi equity allocations, and none expected to reduce them.

Meanwhile, Kuwait will also gain in anticipation of a "positive" decision by MSCI. Around 58 percent of managers expected to raise Kuwait equity allocations, and only eight percent expect to cut it.

Kuwait will hear in mid-2019 if MSCI will upgrade it to emerging market status. 

Additionally, one-third of fund managers expect to increase their allocations to regional equities over the next three months, while eight percent planned to reduce them, according to a poll of 12 leading fund managers.