The fifth and final phase of Saudi Arabia's inclusion in FTSE Russell Emerging Market Index will be implemented today, March 19, with an inclusion factor of 25%, according to data compiled by Argaam.
On Monday, FTSE Russell announced that it will divide the fifth phase of Tadawul’s inclusion in its Emerging Market Index into 2 tranches, scheduled in March and June this year.
Accordingly, the first phase will be effective on Monday, March 23, based on the closing prices of Thursday, March 19, with an inclusion factor of 25%.
The second phase will be effective in June, 2020 with an inclusion factor of 75%.
During the fifth phase, inactive investments in the Saudi market is expected to reach SAR 4.5 billion, only SAR 1.12 billion will be injected today.
According to the requirements of the global indices manager, buy and purchase transactions, accounting for 6.25% of the market cap., will be completed during the closing auction and trade-at-last, which allows investors to determine stock prices to reach a fair price.
The closing auction starts after continuous trading (Market Open session) at 3:00 pm to 3:10 pm, when investors can place orders. Later, the trading engine will determine an equilibrium price at which all possible matching orders are executed at the end of the auction. The execution price is the closing price and becomes the next day’s reference price.
As for the trade-at-last session, it starts at 03:10 pm and ends at 03:20 pm, and investors can place their orders only at the closing price formed as a result of the closing auction.
It is worth mentioning that the first phase was included on March 18, 2019, the second phase on May 1, and the third phase on June 24. The fourth phase was included on Sept. 23, 2019.
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Stages of Including Tadawul into FTSE Emerging Market Index |
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|
Tranches |
1st tranche |
2nd tranche |
3rd tranche |
4th tranche |
5th tranche |
|
|
Review date |
March 18, 2019 |
May 1, 2019 |
June 24, 2019 |
Sept. 23, 2019 |
March 23, 2020 |
June 2020 |
|
Tranche size |
10 % |
15 % |
25 % |
25 % |
25 % |
|
|
25% |
75% |
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|
Total |
10 % |
25 % |
50 % |
75 % |
81.25% |
100% |
|
Non-active investments* |
1.8 |
2.7 |
4.5 |
4.5 |
1.12 |
3.38 |
*SAR bln
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Transactions During Inclusion of Tadawul into FTSE Emerging Market Index |
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|
Tranches |
Investments (SAR bln) |
Total number of shares (mln) |
Total number of transactions (‘000) |
|
First phase* |
1.40 |
38..8 |
5.4 |
|
Second phase |
2.50 |
55.4 |
4.4 |
|
Third phase |
5.21 |
125.2 |
8.6 |
|
Fourth phase |
4.90 |
136.3 |
12.6 |
*inclusion of foreign funds affiliated to FTSE and S&P Dow Jones Indices
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