The Capital Market Authority explained that the Kingdom’s inclusion in international indices, including the Morgan Stanley (MSCI) Emerging Markets Index, will have several benefits, including supporting market stability and reducing volatility by promoting institutional investment, which increases the efficiency of the financial market, and enhancing the attractiveness and liquidity of the market, as it makes the Saudi financial market accessible to a large segment of investors in various countries around the world who target investment in emerging markets, as many investment funds and global investment institutions rely on global indices for investment by allocating a part of their investments to the Saudi market based on its weight in those indices.
Among the expected benefits of joining are: raising the level of disclosure by listed companies and activating the role of investor relations as a result of the increased contribution of institutional investors, raising the level of research and studies on listed companies that support investors in making their investment decisions, in addition to supporting the performance of persons licensed to deal in securities by increasing the client base and activating the role of custody service providers more.
In the same context, Mohammed bin Abdullah Al-Quwaiz, Vice Chairman of the Capital Market Authority, confirmed that placing the Saudi financial market on the MSCI Emerging Markets Index watch list is the first step towards the Saudi financial market joining the index in full. He pointed out that this step represents a qualitative leap in the local financial market and is consistent with the Authority’s strategic direction in order to achieve the goals of the Kingdom’s Vision 2030. It is also a translation of the efforts undertaken by the Capital Market Authority to develop the Saudi financial market and move it to the ranks of global markets.
