As it stated in
Q: What makes you believe that Saudi Arabia will be added to the watch list?
As such, we would see this as a very negative event for the Saudi market, but think no watch list is highly unlikely.
Q: Assuming Saudi Arabia is added to the list, do you see a rally under way?
Passive inflows alone would be equivalent to 2.5-3 times current active holdings in the Saudi market.
Local investors in particular seem unprepared for a watch list decision.
Saudi Arabia Seen Luring Billions With MSCI Indexes Now in Sight
More than $1.5 trillion in assets are benchmarked by money managers to the MSCI Emerging Markets index family.
They estimate Saudi Arabia would have a weighting of 2.2 percent in that emerging markets index, excluding Aramco.
Saudi Arabia allowed money managers outside the Gulf to own local shares directly only two years ago.
Visitors stand and watch stock movements displayed on large video screens inside the Saudi Stock Exchange, also known as the Tadawul All Share Index in Riyadh, Saudi Arabia, on Monday, Nov.28, 2016.
As crude oil prices declined this year, the Tadawul gauge has dropped, lagging behind an average of peers as measured by the MSCI Emerging Markets Index, which increased 17 percent through June 19.
collected by :John Locas