Sentiment becomes "marginally less optimistic" towards Saudi banks post-MSCI first tranche inclusion | ZAWYA MENA Edition

Sentiment becomes "marginally less optimistic" towards Saudi banks post-MSCI first tranche inclusion | ZAWYA MENA Edition:

Sentiment towards Saudi banks has turned less optimistic after the first tranche inclusion of the kingdom’s stock exchange in the MSCI Emerging Markets index, a report said last week.

“Despite the recent correction in Saudi banks, valuation multiples are above historical levels and sentiments are now marginally less optimistic than before, post-first tranche of MSCI inclusion,” Pritish Devassy, head of equity research at Al Rajhi Capital said in a note published on Tuesday last week.

Saudi Arabia’s stock market joined the MSCI emerging market (EM) index at the close of the trading session on Tuesday, May 28. A total of $40 billion of foreign fund inflows is expected to flow into the market as a result of the inclusion.