Al Rajhi Capital sees 'slim' possibility to add Americana to MSCI Saudi Arabia Index quarterly review

Logo of Americana Restaurants International

Al Rajhi Capital said, in a report, that Americana Restaurants International PLC Co. is deemed the sole runner-up for a spot in the quarterly review of MSCI Saudi Arabia Index, albeit with a “slim” possibility.

It also noted that, other than Americana, it does not see any new inclusions/exclusions to the index’s quarterly review, which is considered more stringent than the semi-annual one.

This is because MSCI does not make any notable changes on a quarterly basis, unless there are sizable transactions (mainly major IPOs and businesses witnessing sharp gains in market cap) that meet all the criteria, with the exception of the minimum length of trading, said Al Rajhi Capital.

Americana’s current market cap is large enough to meet the stringent requirements. Its free-float market cap also matches the eligibility criteria, but only meagerly.

Al Rajhi Capital estimated that Americana will witness inflows of $105 million in case of index inclusion. On the other hand, it will see net outflows of $16 million and $11 million from Al Rajhi Bank and Saudi National Bank (SNB), respectively, mainly due to changes in the index weights.

The brokerage also noted that both Saudi Aramco Base Oil Co. (Luberef) and Kingdom Holding Co. (KHC) meet most of the required criteria, except for the final requirement of the free float-adjusted market cap. "Both could get included during the semi-annual review in May 2023, if the respective share prices remain at this level," it said.