Saudi Arabia To Open Stock Market; How Big Is Saudi? By Shuli Ren Saudi Arabia, whose stock market has been off-limits to outsiders, said today it would allow foreign investors to buy and sell shares starting next year, through a Qualified Foreign Investors program (QFIs) not unlike what China has for foreigners to access its domestic stock markets. Opening up the domestic market means Saudi Arabia could be included in MSCI Emerging Markets Index. The Tadawul All Share Index climbed 2.8% today, to the highest level since May 2008. We know Saudi is the world’s biggest oil exporter, but how big is its stock market? The market cap for MSCI Saudi Arabia Index is $184 billion, making it almost as big as Russia, or about 20% of MSCI EMEA and 2% of MSCI Emerging Markets. If we assume a 20% cap on foreign ownership, J.P. Morgan reckons that Saudi Arabia will be a little bigger than Poland orTurkey. The Saudi all-share index (which is bigger than MSCI Saudi index) has a total market cap of $531 billion. Its market trades approximately $2.2 billion a day on average. Among emerging markets, it is the largest stock market after China. Saudi’s decision to open up its stock market is perhaps related to the outsized performance in the region. It underperformed United Arab of Emirates and Qatar by 30% and 8% in the last year. UAE and Qatar were moved by MSCI to emerging markets this spring. This morning, the iShares MSCI UAE Capped ETF (UAE) lost 1%. The WisdomTree Middle East Dividend Fund (GULF) gained 0.5%.
Posted on: Wed, 23 Jul 2014 03:54:16 +0000
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