Saudi Arabia Added to MSCI Emerging Markets Index

Thursday, 21 June, 2018 - 11:00
Riyadh, New York- Shuja Al-Baqmi and Asharq Al Awsat

Index provider MSCI said on Wednesday it will begin including Saudi Arabia in its classification as an emerging market, sharply broadening the investor base for the country in a move that could support their equity markets.

Meanwhile, Saudi stock market resumed its trading following the suspension for Eid Al-Fitr holiday, amid remarkable profit on the shares of leading companies, especially in the banking sector.

On Wednesday, Saudi stock market fell by about 100 points, but the decline did not restrain the shares of some of the small and medium-sized companies from rising, while the shares of the insurance sector rose about 1.23 percent, amid good gains made by sector shares.

The Saudi Stock Market index closed on Wednesday at a decline of 1.3 percent, 8166 points, with few transactions in terms of liquidity amounting to about $ 498.6 million.

These developments come after Saudi Arabia's launch of the Financial Sector Development 2020 Program. The Program is one of the 12 executive programs launched by the Council of Economic and Development Affairs (CEDA) to achieve the objectives of Vision 2030. The program seeks to develop the financial sector as a diversified and effective financial services sector to support the development of the national economy by stimulating savings, finance and investment.

The program’s objective is to create a thriving financial sector that serves as a key enabler in achieving Vision 2030’s objectives. By 2030, the sector is expected to grow large enough to fund Vision 2030 objectives, offer a diverse set of products and services through traditional and newly emerging players, give citizens thus far excluded from the financial system access to it with an inclusive structure, achieve a high degree of digitization and maintain financial stability.

Through its first pillar, “enabling financial institutions to support private sector growth”, the Program aims to promote a diverse and inclusive sector that drives innovation and serves the financial needs of a broader population. In doing so, it will open the sector to emerging FinTech players, remove obstacles that hinder the growth of finance companies, unlock financing for SMEs, and increase mortgage penetration. Further, the program will improve access to financing and enhance product offerings to better serve the needs of economic sectors.

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