Index compiler MSCI Inc said it could rank Saudi Arabia as an emerging market alongside countries such as Brazil and China, if the oil-rich kingdom moves ahead with longstanding plans to open up its stock market to foreign investors.
That could vault Saudi Arabia above smaller regional markets such as the UAE and Qatar, which MSCI continues to rate as “frontier” markets in its global market indexes. Inclusion in the MSCI emerging markets index tends to lead to a big inflow of investment from global stock market funds which track the index.
In its yearly market clarification review, released late Wednesday, MSCI noted that investors from outside the Gulf Cooperation Council, or GCC, region currently have only indirect access to the Saudi equity market. Foreigners can access the Saudi market using swaps “which for institutional investors may cause compliance issues,” MSCI said.
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