MSCI, the world provider of indicators and the Saudi stock exchange (Tadawul), announced the launch of the joint stock of the MSCI 30 Index (MT30), the value of traded shares in the kingdom accounting for approximately 72% of the total volume in the Middle East and North Africa.
The MSCI 30 Trading Index (MT30) includes almost 30 listed companies in the Saudi market, the largest market value and most traded, and will be exported four times a year.
Khalid Al Hossan, Tadawul's CEO, said: "The launch of the MSCI 30 (MT30) is an important step towards creating the Saudi derivatives market and progressing with the 2030 Financial Sector Development Program goals."
"With plans to launch other derivatives, including financial futures contracts to be launched this year, we expect significant steps this year to increase market efficiency and create new opportunities for investors to diversify risks and increase the openness of the Saudi financial market," he added. The largest volume and liquidity market in the region. "
The number of companies ranged from 25 to 35 to reflect changes in the stock market in Saudi Arabia, with a maximum weight of all shares of 15% of the total weight of the index.
This index will be an important benchmark for investors who are interested in the most liquid and larger companies on the Saudi financial market. It will also be the basis for the development of futures contracts on the stock market in Saudi Arabia, the ETF and other traded products including derivatives.
MSCI and Tadawul announced their plan to create a common trade index in September 2018. MSCI announced the launch of the stock market in Saudi Arabia as an emerging market in the MSCI Emerging Markets index. June 2018, reflecting the opening of the Saudi financial market to a larger segment of investors.
The Saudi stock market will join the MSCI Emerging Markets in two phases – the first phase of the mid-2019 index review that will enter into force at the beginning of June of the same year.
Robert Ansari, Regional Director of MSCI Middle East, said: "We have seen growing demand from institutional investors to provide usable tradable indices as a basis for developing financial products that offer access to world financial markets. consideration of the maximum weight of the individual components of the shares to ensure an appropriate investment environment for future index futures and other traded derivatives and financial products. "
Exchangeed companies that do not allow foreign investment are not eligible to be listed in the MSCI 30 index (MT30), except for the percentage of listed companies that remain available to foreign investors in relation to the maximum permitted inclusion of the index and the determination of the share weight.
The MSCI 30 (MT30) business index will be based on the broader MSCI financial market index (IMI). This index covers approximately 91% of the adjusted market value of free market shares in the Saudi stock market.
In order to be eligible for the MSCI 30 (MT30), additional liquidity and tradability criteria such as trading frequency and trading days for the period, divided by the total number of trading days during the trading book period, the annual trading value of shares for the adjusted market values of free shares and the limits of ownership of foreigners.
According to the data, the companies selected for the "MSCI 30" index (MT30) are the best qualified, with 30 largest companies in terms of volume (free market capitalization).
The MSCI 30 (MT30) is a common trader through which various investment products such as ETFs, futures, CFDs and other derivatives can be developed.
The index index futures traded on the MSCI Tadawul 30 index is the first financial product and is expected to commence in the second quarter of 2019.
With today's market of around $ 500 billion, the Saudi market is now the largest financial market in the Arab world with a market capitalization three times the market value in the GCC.
MSCI Index 30 will be revised quarterly at the end of the last business day in May, August, November, and February, in conjunction with the MSCI International Financial Markets index.
The MSCI 30 (MT30) trade index aims to select the 30 largest liquidity-listed companies from the wider MSCI Saudi Financial Markets (IMI) index.
The MT30 index is roughly 30 components to provide a sample representing the direction of market movement. First, the MSCI 30 (MT30) index covers about 88% of the market value of the Saudi Stock Exchange.
The index is indicative of global and national investment institutions as a basis for various financial products from traded derivatives and index funds and as an alternative indicator of the Saudi stock market.