MSCI has signed an agreement with the Saudi Stock Exchange (Tadawul) to create a joint tradeable index that can serve as the basis for investment instruments including derivatives and ETFs.
In June 2018, MSCI announced the classification of the Saudi Arabian equity market as an Emerging Market as part of their annual global market classification review. The Index will be based on the broader MSCI Saudi Arabia index series that will be part of the MSCI Emerging Markets Index. The joint tradeable index will be available in Q4 2018.
Henry Fernandez, Chairman and Chief Executive Officer of MSCI, says: “Saudi Arabia has undergone a remarkably rapid period of change in the past few years. This joint index is possible as a result of the Kingdom’s adoption of international standards and desire to create additional investment opportunities for domestic and international investors.”
Khalid Al Hussan, Chief Executive Officer of Tadawul, says: “The creation of the joint tradable index provides a strong foundation for the development of index futures and other exchange-traded products. As the Saudi market is fully integrated into global emerging market indices, including MSCI, launch of an index will pave the way for ETFs and other products that enable investors to broaden exposure and diversify and risk while enhancing the overall efficiency of the market.”
