Tadawul ‘optimistic’ on FTSE emerging market inclusion: Al Suhaimi

The chief of Saudi Stock Exchange (Tadawul) said she is “very optimistic” that FTSE Russell will choose to include Saudi Arabia in its list of emerging markets – a decision that could potentially lead to billions of dollars in passive inflows to the Kingdom, Bloomberg reported.

"The feedback we have heard from investors is positive," Sarah Al Suhaimi, chairperson of Tadawul, said in an interview. "They had certain concerns and we have addressed most of them, so generally we’re optimistic."

FTSE Russell will announce its decision on whether Saudi Arabia will be included among emerging markets countries on Wednesday, after markets close in the US.

The Tadawul All Share Index (TASI) has risen nearly 10 percent this year, supported expectations that FTSE will provide a positive update and it will be followed by a similar decision by MSCI in June.

Analysts expect that a positive update from FTSE could lead to inflows of between $4 billion and $5 billion, according to a recent survey by Argaam.

Meanwhile, in a separate interview with CNBC, Al-Suhaimi said the stock exchange was preparing for the initial public offering of state-owned oil firm Saudi Aramco.

"We are doing everything to get ready for Aramco's listing," Al Suhaimi said.

The exchange has made a number of changes in the past two years, including spinning off its depository center last year and moving the settlement cycle for trades from the same day to two days, she added.

"Those were a few of the main requirements for international investors in our efforts to open up the Saudi market for investment, which started in 2015 and have been accelerated especially in the last 12 months,” she said.

Aramco’s IPO is planned for the second half of this year, with listing expected to be on Tadawul and at least one other international exchange.