MSCI upgrade to boost investor confidence: Al Tuwaijri

The Saudi Stock Exchange’s (Tadawul) upgrade to the MSCI Emerging Market (EM) index is a “new testament” to the market enhancements implemented in line with the Saudi Vision 2030, state-owned SPA reported citing Mohammed Al Tuwaijri, Minister of Economy and Planning.

The MSCI upgrade will boost the capital market liquidity, diversify investment opportunities and enhance investor confidence in the market stability.

Al Tuwaijri also indicated that the Saudi financial market development will further boost the economic growth and render the Kingdom as an attractive investment hub.

Over the past three years, the CMA and Tadawul have implemented several enhancements that further opened the domestic equity market to international institutional investors.

Tadawul was upgraded to Emerging Market from its previous Standalone market status by MSCI in its Annual Market Classification Review on Wednesday.

Following the introduction of a regulation for qualified foreign financial institutions by the CMA in 2015, the means of access to the equity market evolved from indirect holdings using derivative instruments, such as P‐notes and/or SWAPs, to direct holdings. This regulation has since been enhanced twice by the CMA, reflecting feedback from international institutional investors, MSCI said.