Saudi Stock Euphoria Is Unwinding as the End of Catalyst Nears - Bloomberg:
This week could mark the beginning of the end for the biggest equities play in Middle Eastern markets: the upgrade of Saudi Arabia to emerging-markets gauges.
As index compiler MSCI Inc. starts adding Saudi stocks to its EM benchmark as of the close of May 28, passive flows are expected to flock to Riyadh. But many active traders are already focusing on expensive valuations, falling earnings estimates and geopolitics.
The main Saudi index is heading for its biggest monthly drop since January 2016, indicating a rally anticipating the event may be losing steam. MSCI moves on to the second stage of the addition in August, while FTSE Russell finishes its own upgrade next year.
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