Final phase of Saudi Arabia's inclusion in FTSE starts today

The second tranche of the fifth phase of Saudi Arabia's inclusion of foreign funds affiliated to FTSE Russell Emerging Market Index starts today.

Sell/buy transactions will be executed at 18.75% of the Saudi market index weight.

The fifth phase is divided into 2 tranches; the first started with an inclusion factor of 25%, while the second will be effective on June 22, 2020, with an inclusion factor of 75%.

During the fifth phase, inactive investments in the Saudi market are expected to reach SAR 4.5 billion, out of which SAR 3.38 billion will be injected today.

According to the requirements of the global indices' manager, these transactions will be completed during the closing auction and trade-at-last, which allows investors to determine stock prices to reach a fair price.

The closing auction starts after continuous trading (Market Open session) at 3pm to 3:10pm, when investors can place orders. Later, the trading engine will determine an equilibrium price at which all possible matching orders will be executed at the end of the auction. The execution price is the closing price and becomes the next day’s reference price.

As for the trade-at-last session, it starts at 3:10pm and ends at 3:20pm, and investors can place their orders only at the closing price formed as a result of the closing auction.

The first phase was included on March 18, 2019 and the second on May 1. The third phase was later included on June 24 and the fourth on Sept. 23, 2019.

*Inclusion of foreign funds affiliated to FTSE and S&P Dow Jones Indices