Franklin Templeton funds were approved to be Qualified Foreign Investors (QFI) in Saudi Arabia, which allows them to invest directly in the Saudi stock market (Tadawul), according to the fund's Monday statement.
This move came after global index compiler FTSE Russell decided to include Tadawul to the Emerging Markets index in March, while MSCI is expected to do a similar move this month.
Upgrading Tadawul, along with Aramco's listing, are projected to attract billions of foreign investments into the Kingdom, which will help in the implementation of the economic transformation program that aims at stimulating growth and employment.
“Saudi Arabia is a reform story on many levels.. Bold fiscal reforms, including steps to reduce its reliance on oil, will put Saudi’s economy on more sustainable footing over the long-term,” Bassel Khatoun, managing director, frontier and MENA of Franklin Templeton Emerging Markets Equity said commenting on the move.
The Saudi market saw foreign inflows of $3 billion in 2018, which raised total foreign investments in Tadawul to $9 billion. Additional $35 billion are expected to be added after the anticipated inclusion to the MSCI index and another $50 billion following the potential IPO of Saudi Aramco.
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