The inclusion of the Saudi Stock Exchange (Tadawul) in FTSE Russell Emerging Market (EM) index will lead to passive inflows of nearly SAR 2.6 billion ($700 million) in March, Riyadh-based Jadwa Investment said in a report.
“Passive inflows related to both the FTSE EM and MSCI EM indices are expected to total at least SAR 56 billion ($15 billion) during 2019,” it added.
Nishit Lakhotia, Head of Research, SICO Bank, told Argaam earlier that the expected passive inflow is estimated at around SAR 18.75 billion ($5 billion) through FTSE and SAR 37.50 billion ($10 billion) through MSCI throughout the year.
Muhammad Faisal Potrik, Senior Vice President, Head of Research, Riyad Capital also expects total MSCI and FTSE index inclusion related inflows to be between SAR 70 billion ($18.6 billion) and SAR 80 billion ($ 21.3 billion).
While Tadawul witnessed SAR 6.75 billion of foreign inflows YTD (SAR 5.95 billion in 2018), Al Rajhi Capital said inflows are likely to continue in the coming months due to FTSE and MSCI inclusions, scheduled in March and June 2019.
Last month, Khalid Al Hussan, chief executive officer of Tadawul, told Reuters that they are expecting $15 to $20 billion in passive fund inflows this year.
Saudi Arabia will witness five tranches of FTSE inclusion during 2019 starting March and ending in December. The MSCI inclusion will be in two tranches – first taking place in May followed by the next in August.
Write to Parag Deulgaonkar at parag.d@argaamplus.com
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