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Simon Dawson / Bloomberg / Getty Images
The Saudi Stock Exchange, also known as the Tadawul All Share Index, in Riyadh, Saudi Arabia
The Saudi Arabian Stock Exchange, Tadawul, broke through on Monday its first step in inclusion in two major international indexes: the emerging market indices FTSE Russell and S & P Dow Jones.
This inclusion marks the continuation of the Saudi Kingdom's efforts to open its market to international investors, said Tadawul CEO Khalid Abdullah al-Hussan at Hadley Gamble of CNBC in Riyadh.
"We have not seen any turbulence on cash inflows for the first tranche of FTSE and sellers and buyers have shown a lot of flexibility, which, in my opinion, has confirmed the confidence of international investors for their participation in the Saudi markets and the regulatory framework of the Saudi capital market, "said al-Hussan.
Al-Hussan expects this inclusion to generate pbadive inflows of about $ 15 billion across all indices, adding that the calculation of the expected active funds is more difficult.
Inclusion in the FTSE Russell Emerging Markets Index will be in five tranches over the next 12 months, while inclusion in the S & P Dow Jones Emerging Markets Index will be completed by a second phase in September of this year. The first 25% of Monday "will be spread over March 2019 and April 2019 (10% and 15% respectively) to ensure a smooth transition," according to a Tadawul press release.
Capital market reforms and economic liberalization are at the heart of Saudi Arabia's 2030 Vision, which aims to encourage more foreign investment to diversify its economy and create jobs in the private sector. .
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