Tadawul, MSCI launch joint index for domestic, international investors

The Saudi Stock Exchange (Tadawul) has signed an agreement with index provider MSCI Inc. to create a joint tradeable index that can serve as the basis for investment instruments including derivatives and ETFs. 

In June this year, MSCI upgraded Saudi Arabia to Emerging Market status as part of their annual global market classification review.  

The new joint tradeable index will be based on the broader MSCI Saudi Arabia index series, which will be part of the MSCI Emerging Markets Index. The index will be available in Q4 2018.

“Saudi Arabia has undergone a remarkably rapid period of change in the past few years,” said Henry Fernandez, chairman and chief executive of MSCI.

“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,” he added.

Khalid Al Hussan, Tadawul CEO, said: “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,” Al Hussan added.