MSCI World plans to upgrade the market status of UAE and Qatar but neglects Saudi Arabia. The index compiler is a stock market index of 1500 global stocks. MSCI is considered as a benchmark in stock market.
MSCI index includes stocks from developing countries defined by MSCI but excludes stock from emerging and frontier economies. However the MSCI All Country World Index (ACWI) includes stocks from both developed and emerging countries. MSCI also includes the Frontier Market index that ranks different markets.
Saudi Arabia?s Tadawul stock has shown interest in joining MSCI and is also in talks with other index providers. Abdul Rahman al Tuwaijri, president of the Saudi Capital Market Authority (CMA), commented that the Saudi is eligible to be a part of any stock index and is at par with other UAE or Qatar. So far no other details are available other than the initiation of talks by the authorities but it is an indicator that officials are ready for relaxing regulations to get included.
Tadawul stock is the largest and highly liquid stock bourse. Its significance was highlighted during the regions uprisings, when there was constant movement of capital from the kingdom. Still it was inaccessible to foreign investors. In the year 2008, the country allowed foreign investors to buy Saudi shares indirectly through total return swaps from licensed brokers of the country. The swaps, however, do not giving any voting rights but allowed access to the market. According to analysts, this fact alone is not sufficient for upgrading the status.
However, an upgrade would not only boost the image of Tadawul but also will witness an increase in business.