$30-$50bn inflows expected after Saudi market upgrade

Mohammed El-Kuwaiz

Saudi Gazette report

— Some $30 billion to $50 billion inflows are expected into the Kingdom’s stock market due to its inclusion in major global benchmarks, according to the chairman of the Capital Market Authority (CMA) Mohammed El-Kuwaiz.

“These expected inflows are part of the remaining funds, and the other active investments will move after the decision to upgrade,” El-Kuwaiz told Al Arabiya on the sidelines of the World Economic Forum in Davos.

He said foreign investors will be able to own more than 50 percent of Saudi companies, which will attract more foreign inflows to the Saudi financial market.

The taps of foreign capital are about to open for a number of Gulf states over the coming months, with Saudi Arabia poised to be included on the FTSE Russell index from March.

Over the next 12 months, the Kingdom is also expected to be included on the MSCI EM index as well as the J.P. Morgan Emerging Market government bond index.

Speaking to CNBC, El-Kuwaiz said: “We believe it is going to change the market quite markedly.”

“We are actually quite excited to see how this will change the market dynamic, increase the depth, increase institutionalization,” he added.

Inclusion in these major global benchmarks is expected to trigger tens of billions of dollars into Saudi Arabia’s debt and equity markets.