Saudi Tadawul reclassifies market sectors

The Saudi Stock Exchange (Tadawul) has reclassified its equity market sectors according to the Global Industry Classification Standard (GICS), which will be effective starting Jan. 8, 2017, Tadawul said in a statement on Thursday.

“This step is in line with Tadawul’s strategy to support the development of the Saudi capital market, and aims to enhance transparency and provide more reliable information on sector performance,” the statement added.

The new structure consists of 20 industry groups, representing the second level of GICS, as sector summaries and indices will be calculated based on it, while level one will still be available on Tadawul website as basic information.

Business activity and revenue are the two main factors of classification.

Current sector indices will no longer be calculated, as new unified sector indices will be calculated at 5,000 points (Base Values), plus the companies’ data for one year back. This will allow better sector performance comparability.

The new indices and the changed percentage values will appear on the second day of the launch. The companies’ history will still be available at Tadawul’s website.

The materials sector comprised the biggest number of listed companies, including leading petrochemical companies such as SABIC and SAFCO.