The Saudi Arabian stock exchange has won its third major upgrade of the year, with S&P Dow Jones Indices (S&P DJI) promoting the Tadwaul in Riyadh to emerging market status.
The move follows similar reclassifications of the Tadwul by index compilers FTSE and MSCI earlier in the year, and sets the seal on global acceptance of Saudi Arabia as an investment destination.
Khalid Al-Hussan, chief executive of the Tadawul, said: “It is a testament to growing investor confidence in the Saudi market and reflects the successful implementation of far-ranging capital market reforms in line with Vision 2030 that have further enhanced the accessibility of Tadawul to international investors.
“While we are proud of these important milestones, they only reaffirm our commitment to continue to move forward with our ongoing efforts to strengthen the effectiveness of the Saudi capital market, foster an attractive investment climate for local and international investors and further integrate and align the Saudi capital market with global markets and best practices,” he added.
In its decision, S&P DJI cited the “positive results of the Kingdom’s ongoing market reforms and enhancements, and a strong consensus for the upgrade among the international investment community.” It has previously been classed a “standalone market” by S&P DJI.
The Kingdom will become eligible for inclusion in certain S&P DJI’s global benchmark index families in two phases, concurring with the March 2019 quarterly rebalancing and the September 2019 annual reconstitution.
Saudi stocks that are currently part of the S&P Saudi Arabia BMI (benchmark index) will initially be eligible for phased inclusion in the S&P Global BMI, S&P Global BMI Shariah, S&P/IFCI Composite, Dow Jones Global Index and Dow Jones Islamic Market World Index. Eligibility for inclusion in other S&P DJI index families will begin in September 2019, the index complier said.
The Tadawul has been one of the world’s best performing stock markets this year, with a first half rise of 15 percent.
