#Saudi EM Inclusion Begs Question About Elephant in the Room - Bloomberg

Saudi EM Inclusion Begs Question About Elephant in the Room - Bloomberg:

Saudi Arabia’s inclusion in emerging market stock benchmarks highlights the role of largely opaque players in the kingdom’s market: government funds that could be ready to push the sell button.

FTSE Russell will start adding Saudi equities to its developing-nation gauges on Monday, with peer MSCI Inc. following suit later. Inclusion is eventually expected to trigger billions of dollars in inflows from so-called passive buyers, whose assets track benchmarks and must align with the gauges.

Other investors may hold off because they see funds with links to the government, whose holdings may have buoyed stocks during recent political turmoil, as primed to offload stakes as newcomers enter.