Foreigners Slow #Saudi Share Spree Even as Index Upgrade Nears - Bloomberg

Foreigners Slow Saudi Share Spree Even as Index Upgrade Nears - Bloomberg:

Foreign investors are slowing the pace at which they are buying Saudi stocks, even as the kingdom’s inclusion in major emerging-markets benchmarks lies just around the corner.

Foreign investors were net buyers of about 443 million riyals ($118 million) in Saudi shares last week, a drop of 47 percent from the previous five days and the second straight week of slower purchases. Analysts and traders are closely monitoring the appetite for the country’s shares as they are about to begin to be included in emerging-market benchmarks compiled by FTSE Russell and MSCI Inc. next month and in June, respectively.

As investors anticipate purchases before the upgrades, some emerging-markets money managers view Saudi stock valuations as too high compared with the category they’re about to join. In January, the Tadawul All Share Index reached the most expensive level relative to the MSCI Emerging Markets Index since 2015, when measured using estimated price-to-earnings in the next 12 months.