Al Rajhi Capital sees no changes to MSCI Standard Index in February

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Al Rajhi Capital said that no possible changes are expected to the MSCI Saudi Arabia Standard Index including large and mid-cap, not small cap) in February. However, the next review (May 2025) could see a few changes subject to the share price movement.
 

Al Rajhi Capital said that no possible changes are expected to the MSCI Saudi Arabia Standard Index including large and mid-cap, not small cap) in February. However, the next review in May 2025 could see a few changes subject to the share price movement. 
 

Considering the latest reference point cut off, the market capitalization for most of the existing constituents is above the reference threshold, Al Rajhi Capital said in a recent note. 
 

For Savola Group, Saudi Kayan Petrochemical Co., Advanced Petrochemical Co. and Zain KSA, the market capitalisation breaches the cut off but still continues to be above the lower threshold. 
 

“We have noticed in the past that companies not meeting the reference point cut-off but are above the lower threshold (0.67 times of the cut-off) are not excluded. Thus, we expect no exclusions in this review,” Al Rajhi Capital said.
 

On the other hand, screening for potential inclusion candidates, Riyadh Cables Group with market capitalization of SAR 21.2 billion reasonably satisfies all criteria for investability screen except for the free float cut-off. Astra Industrial on the other hand satisfies the free float cut-off but in order to meet the upper threshold of the segment cut-off it would need to rally another 12-13%. Consequently, they are unlikely to be included in the Standard index in the upcoming review.
 

Nevertheless, these stocks could get included in the next review subject to the rally of 8-18% from current levels since all other requirements are adequately being satisfied.
 

Assuming the proforma weight of Saudi Arabia remains unchanged at 4.24% (rounded up) in the MSCI EM, no major inflows/outflows are estimated since.

there will possibly be no change to the index constituents, the research firm added.