MSCI, a leading provider of indexes and portfolio construction and risk management tools and services for global investors, has announced the signing of an agreement with the Saudi Stock Exchange Company (Tadawul), the largest stock exchange in the region in terms of market capitalization and turnover, to create a joint tradeable index that can serve as the basis for investment instruments including derivatives and ETFs (exchange traded funds).

The index will be based on the broader MSCI Saudi Arabia index series that will be part of the MSCI Emerging Markets Index. The joint tradeable index will be available in Q4 2018.
 
MSCI had announced in June this year the classification of the Saudi Arabian equity market as an Emerging Market as part of its annual global market classification review.  
 
Chairman and CEO Henry Fernandez said Saudi Arabia had undergone a remarkably rapid period of change in the past few years.

For more than 40 years, MSCI’s research-based indexes and analytics have helped the world’s leading investors build and manage better portfolios. Clients rely on our offerings for deeper insights into the drivers of performance and risk in their portfolios, broad asset class coverage and innovative research.

"This joint index is possible as a result of the kingdom’s adoption of international standards and desire to create additional investment opportunities for domestic and international investors," he noted.
 
Tadawul CEO Khalid Al Hussan said: "The creation of the joint tradable index provides a strong foundation for the development of index futures and other exchange-traded products."

"As the Saudi market is fully integrated into global emerging market indices, including MSCI, launch of an index will pave the way for ETFs and other products that enable investors to broaden exposure and diversify and risk while enhancing the overall efficiency of the market," he added.-TradeArabia News Service