Riyadh – Mubasher: Saudi Arabia is expected to attract around $11 billion in liquidity after its potential inclusion in the JPMorgan Emerging Markets Index during 2019, the Saudi Ministry of Finance (MoF) said.
Saudi issuances will represent 3.1% of the indices’ weight after inclusion, the MoF projected, adding that this “will add support to the investor base as well as improve liquidity levels for the government’s issues as well as the issuances of government-owned companies.”
Sukuk and conventional bonds will be eligible for inclusion in JPMorgan’s EMBI Global Diversified, EMBI Global and EURO-EMBIG indices, the US-based bank said in a note to investors last week.
In addition to Saudi Arabia, Kuwait and the UAE, were also eligible for inclusion in the JPMorgan indices, the bank added.
The kingdom previously announced that the MSCI had upgraded the Saudi Stock Exchange (Tadawul) to Emerging Market from its previous status as a Standalone Market in its Annual Market Classification Review.
In March, FTSE Russell added Tadawul as a Secondary Emerging Market.
“The MSCI inclusion alone should translate into $10 billion from passive and $35 billion from active investments, compared to $5 billion in inflows stemming from the FTSE inclusion,” according to UBS Global Wealth Management’s chief investment office.
