Argentina and Saudi Arabia to join MSCI emerging markets index

Saudi Aramco Clears Another IPO Hurdle |

"Saudi Arabia will continue to be a key, strategic market for us", said Sandeep Singh, regional head of Central & Eastern Europe, Middle East and Africa and Head - Islamic Business at Franklin Templeton Investments.

The decisions will be effective beginning in mid-2019.


Saudi Arabia has cleared another hurdle on its way to successfully launching Aramco's initial public offering after MSCI granted it emerging market status in its latest review, Morningstar reports.

MSCI's benchmarks are widely used, with some $14 trillion in investors' assets tracked against them.

Hussan expected 25-30 percent of the projected $45 billion of MSCI inflows to be from "passive" funds, which would buy into the market around the inclusion dates.

In March, rival provider FTSE announced that it would upgrade Saudi Arabia to emerging market status, while S&P Dow Jones said in May that it was holding consultations with investors in a bid to determine whether it would do so as well.

"International investors were impressed by the speed of change in the accessibility of the Saudi Arabian equity market and the level of commitment that the Capital Market Authority (CMA) and the Saudi Stock Exchange have demonstrated".

Saudi Arabia will be added to MSCI's emerging market index next year in two stages, joining a group of countries including Russian Federation and China.

Saudi Arabia was added to a watch list for a potential upgrade previous year, and will now join nations including China, India, Turkey, South Africa and Brazil.

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This Wednesday will be known if Morgan Stanley Capital International (MSCI) rises to Argentina to the category of "emerging market", a decision that the market expects with great anxiety.

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Suhaimi also said the time period that the Saudi stock market was supervised by the MSCI Index is the shortest in comparison to other markets.

"It's of course the trade concerns here, we are looking for more escalations on trade dispute", said Jakob Christensen, head of EM research at Danske Bank (LSE: 0NVC.L - news), adding markets were closely watching countries like India and Russian Federation planning counter measures against Washington's trade actions.

Emerging market managers said they expected the inclusion would lead to substantial inflows for the country. "This will create a much deeper and more liquid market", he said.

FTSE Russell upgraded the country to emerging markets status in March. Can it afford to?

"We are proud that these efforts have gained Saudi Arabia inclusion in the leading global indexes and benchmarks", she added.

"Since then, it eased requirements for these investors with measures such as lowering the minimum amount of assets under management to get the status of qualified foreign investors, or QFI, and aligned trade settlement times with worldwide standards", said Bloomberg.

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