RIYADH, Saudi Arabia, March 18, 2019 /PRNewswire/ -- Today marks the commencement of the first phase of Saudi Stock Exchange's inclusion into the FTSE Russell and S&P Dow Jones Indices (S&P DJI), both leading providers of global equity indexes.
FTSE Russell Emerging Markets Inclusion
Inclusion of Saudi Arabia into the FTSE Russell Emerging Markets (EM) index will occur in five tranches over the next 12 months, the first of which will be completed today. This initial tranche of 25% will be split over March 2019 and April 2019 (10% and 15% respectively) to ensure a smooth transition. The remaining 75% will be implemented in conjunction with quarterly reviews in June 2019, September 2019 and March 2020.
Waqas Samad, CEO of FTSE Russell, noted, "Saudi Arabia's promotion to Emerging market status within FTSE Russell's global equity benchmarks is a significant achievement. The CMA and Tadawul have long been committed to improving Saudi Arabia's capital markets infrastructure and today marks a culmination of their efforts to meet the rigorous requirements for inclusion. FTSE Russell has a strong track record of working closely with exchanges, regulators and market participants in the Middle East to help meet the demand from international investors for benchmark and analytic solutions to facilitate their investments into the region. We look forward to remaining at the forefront of providing innovative solutions for our global clients."
S&P Dow Jones Indices' Global Benchmark Indices
Inclusion of Saudi Arabia into the S&P Dow Jones Emerging Market Indices' (DJI) Global Benchmark Indices (BMI) commenced today with the first of two phases, with the second phase to be completed in September 2019. Saudi Arabia is eligible for inclusion at 50% of float-adjusted market capitalization (FMC) from today and at 100% of FMC on September 23, 2019.
On completion of the first phase, Alex Matturri, CEO at S&P Dow Jones Indices, commented, "Saudi Arabia's recent move in our country classification to emerging market from stand-alone is a result of an ongoing consultation with market participants. It reflects the strong consensus among members of the global investment community and recent positive market structure reforms that support foreign investment in the country. S&P Dow Jones Indices looks forward to continuing to provide innovative index-based solutions in the Middle East region."
Tadawul to continue its commitment to market reforms
Capital market reforms and enhancements implemented over the past two years have paved the way for index inclusion and reflect Tadawul's continued commitment to enhance the effectiveness of the Saudi capital market, foster an attractive investment environment for local and international investors and align its regulatory frameworks with international best practices.
Investment inflows resulting from index inclusion will further enhance liquidity and trading in the Saudi market, which is already among the most liquid of emerging markets worldwide, and further diversify opportunities for issuers and investors.
Tadawul is determined to become an active player in global capital markets as a source of capital and an investment destination, building on its current role as the regional hub leading capital market development in the GCC and the wider MENA region.
Commenting on the inclusion into the FTSE Russell and S&P Emerging Market indices, Khalid Al Hussan, CEO of Tadawul, said:
"The inclusion into these pre-eminent indices is a testament to growing investor confidence in the Saudi market and reflects the successful implementation of far-ranging capital market reforms in line with the Financial Sector Development Program (FSDP) and Vision2030 that have further enhanced the accessibility of Tadawul to international investors. We look forward to welcoming the constituent participants who will invest in these indices, and to building a long term relationship as the Saudi capital market continues to consolidate its leading position in the Middle East and the broader region as a whole."
Saudi Stock Exchange (Tadawul) is the sole entity authorized in the Kingdom of Saudi Arabia to act as the kingdom's securities exchange (the Exchange), listing and trading in securities. The Saudi stock market is the 24th largest stock market among the 67 members of the World Federation of Exchanges and is the dominant market in the Gulf Cooperation Council (GCC) comprising 52 percent of total GCC market capitalization and 79 percent of value traded. The Exchange is the 7th largest stock market amongst its emerging market peers. For more information see: www.tadawul.com.sa
About FTSE Russell
FTSE Russell is a leading global provider of benchmarks, analytics, and data solutions with multi-asset capabilities. It formally reviews country classifications within its FTSE Global Equity Index Series using a comprehensive, transparent and consistent methodology. The review incorporates ongoing country classification research and feedback from FTSE Russell's independent external advisory committees to designate markets as Developed, Advanced Emerging, Secondary Emerging or Frontier.
About S&P Dow Jones Indices
S&P Dow Jones Indices is the largest global resource for essential index-based concepts, data and research, and home to iconic financial market indicators, such as the S&P 500® and the Dow Jones Industrial Average®. More assets are invested in products based on our indices than products based on indices from any other provider in the world. Since Charles Dow invented the first index in 1884, S&P DJI has been innovating and developing indices across the spectrum of asset classes helping to define the way investors measure and trade the markets.