Riyadh – Mubasher: Saudi Arabia is likely to attract up to $35 billion in foreign investments if its stock market, the largest in the Arab world, is added to MSCI Inc.’s emerging-markets index, Deutsche Bank’s CEO for MEA Jamal Al Kishi told Bloomberg in an interview.
“[Our] research anticipates a figure of up to $35 billion of inflows,” Al Kishi revealed, noting that following the recent developments in the Kingdom alongside the ongoing turmoil in some other emerging markets, “Saudi Arabia could potentially attract more significant inflows in my view, but this will not be instantaneous.”
Starting June 2015, Saudi Arabia, the largest oil exporter, began allowing qualified institutional investors from outside the GCC to trade on Saudi stocks.
“This year it moved to a T+2 settlement cycle as part of a drive to diversify its $640 billion economy away from oil,” Bloomberg reported, noting that the Saudi bourse’s Tadawul All Shares Index (TASI) declined 5.4% so far in 2017.
Saudi Arabia is currently moving “at a head-spinning pace”, the Deutsche Bank official stated.
Commenting on the reason behind the “sluggish” investor response, Al Kishi stated that the kingdom “has moved so fast since it announced its reform plans that it’s too ambitious to expect foreign institutional investors to have had the time to make a proper assessment of what is going on in the country.”
He added that the massive progress implemented by the Saudi Capital Market Authority (CMA) over the past few months “is equivalent to years of progress in other jurisdictions.”
“Fund managers are saying: We are not even set up. We haven’t even done the homework that we needed to do on the Saudi market, equities, fixed income, financial markets, liquidity and taxation,” Al Kishi told Bloomberg.
