JP Morgan expects MSCI to include Saudi Arabia in watch list

US-based JP Morgan Chase expects MSCI to add Saudi Arabia to its watch list for potential reclassification as an emerging market, a move that would be followed by an upgrade in mid-2018 with implementation by mid-2019.

The Saudi Stock Exchange (Tadawul) is forecast to attract inflows of up to $6.5 billion on inclusion in the MSCI Emerging Market Index.

Meanwhile, almost $3.4 billion inflows could be lured in after it joins FTSE secondary EM Index, expected to take place in September, JP Morgan added in a recent report.

The Saudi shares will account for 2.4 percent of the MSCI Emerging Markets Index and for 15 percent of Europe, Middle East & Africa (EMEA) markets.

Tadawul would have the same market size of Indonesia or Thailand, half the size of the Russian or Mexican market, double the size of Poland or Turkey and three-times the size of the UAE and Qatari markets.

The global index complier MSCI will announce its annual market classification review list on Tuesday, Argaam earlier reported.