Saudi Arabia upgrades to Emerging Market status


The region’s financial markets have welcomed the news of Saudi Arabia’s upgrade to Emerging Market status by FTSE Russell. What does the upgrade mean?

22 May, ADS Securities – This was a great promotion that will open up doors of investment to the country and attract international investors to the heart of the Middle East. It is estimated that this change in status has the power to boost investment in the kingdom’s economy of up to $40 billion.

Saudi Arabia upgrades to Emerging Market status – What does that mean?

As we all know, the Kingdom of Saudi Arabia, which is the world’s biggest oil exporter, has a lot of capability to grow fast and be a central hub for investment. First of all, it has the largest Middle Eastern market, Tadawul, the Arab region’s biggest stock exchange and Aramco, the world’s biggest oil producer.

In addition to that, Mohammad bin Salman, the Saudi Crown Prince has introduced his own transformative “Vision 2030” plan to reduce the country’s dependence on oil and diversify its economy, which comes side hand in hand with the recent upgrade to enrich the economy with foreign investments.

Saudi Arabia to introduce unique opportunities to international and regional investors

Looking ahead, MSCI, the well-known index provider, is expected to follow with a similar upgrade in June which could attract up to $1.6 trillion in active and passively managed money. Those multi-aspect developments in the kingdom are making investors think harder about the benefits of investing in a developing market that still has so much to offer. Furthermore, Saudi Arabia is willing to introduce unique opportunities to international and regional investors, who are keen to dig into new markets and discover the hidden treasure of the Arabian Desert.

We believe that such a move would improve the future of the Saudi people in the long term as foreign investors will head to the country to invest their funds in the local exchange markets. In turn, this money would develop public service sectors such as health, education, infrastructure, recreation and tourism, which will ultimately increase the GDP and lead to a sustainable and diversified economy.

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This article was provided by analysts of ADS Securities.

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