TASI falls over 1% as MSCI begins final upgrade

Saudi equities dropped over 1 percent on Wednesday morning, after global index compiler MSCI began the final phase of inclusion in the emerging markets index.

The benchmark Tadawul All Share Index (TASI) slipped 1.4 percent, or 114 points, to 8,171 points in the first 15 minutes of trading.

Petrochemicals major SABIC fell 1.5 percent to SAR 99.70, while banking major Al Rajhi sank 1.6 percent to SAR 62.90.

Other banking scrips Riyad Bank, Samba, Albilad, BSFR and SABB were down between 2 and 3 percent.

Saudi Kayan was the top decliner, dropping 3.6 percent to SAR 10.56.

Saudi Arabia has attracted $18 billion in foreign equity inflows so far this year, supported by the MSCI upgrade, the Institute of International Finance said in a new report.

It further said that “exposure to Saudi Arabia’s market represents a natural currency hedge for investors as it local currency is pegged to the US dollar and large foreign reserves”.

However, Vrajesh Bhandari, senior portfolio manager - asset management, Al Mal Capital, told Argaam earlier that they expect the TASI to decline five percent over the next six months.

AlSorayai Group was the top gainer, rising 2  percent to SAR 11.08.

Following the final tranche of MSCI inclusion, Saudi Arabia’s weighting on the MSCI EM index will increase to 2.83 percent from 1.45 percent based on August 27 closing prices.
 
On Tuesday, TASI registered a total turnover of SAR 28.6 billion after the Saudi Stock Exchange (Tadawul) had extended the closing auction and trade-at-last sessions for 20 minutes each. 

Write to Parag Deulgaonkar at parag.d@argaamplus.com