The major announcements for Saudi Arabia’s economy and society in the last few weeks related to the release of its ‘Vision 2030’ strategy have given the Kingdom a roadmap and targeted benchmarks for achieving greater economic diversification and empowering Saudi Arabia’s youth.
In addition to the ‘Vision 2030’ release and cabinet changes there was “an equally important but perhaps less publicized announcement by the Capital Market Authority (CMA), which will have a major impact on the Saudi Stock Exchange (Tadawul),” writes Jadwa Investment’s Fahad Al-Turki.
While “these latest set of rules/amendments form a part of a longstanding plan to further open up Tadawul, they have been given added impetus as a result of the broader reforms set out by the Saudi Vision 2030 plan.”
Graphic via Jadwa Investments
The new rules, when applied during H1 2017, “will mean that Tadawul will lead the region in being the first to introduce market instruments and processes that not only increase market liquidity, but also add to institutional confidence and investor choice,” according to Jadwa Investment.
Saudi Arabia’s stock market is the region’s largest, diverse and most mature capital market, Al-Turki notes.
“All the measures detailed by the CMA pave the way for the future inclusion of Saudi Arabia into the MSCI Emerging Market Index (MSCI EM) but some potential obstacles, all of which are surmountable, could delay inclusion.”
[Click here to view the full .PDF overview on the changes by Jadwa Investment]
