Middle East to be UK investment target after EU exit

Britain’s Prime Minister Theresa May arrives on the first day of an EU summit in Brussels on Dec. 14. (AFP)
Updated 15 December 2017
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Middle East to be UK investment target after EU exit

LONDON: A new British commercial push in the Middle East is being lined up as part of a wider UK initiative to tap key markets as the country exits the EU.
The Middle East is among a number of regions that will be targeted by new UK trade commissioners, according to the Department of International Trade (DIT) in London.
It comes as Britain seeks to bolster its trade beyond the EU as it prepares for Brexit.
EU leaders have agreed to open talks on a future relationship with Britain once it leaves the bloc, but warned it would be “dramatically difficult” to reach a deal before Brexit in 2019.
A DIT spokesman told Arab News: “Working with governments and businesses across the Middle East, the incoming commissioners will be responsible for unblocking barriers to trade in the region, as well as opening up opportunities for UK companies to export to and invest in the Middle East.”
He added the commissioners would open up new opportunities for UK companies to export to and invest in the Middle East, and work with investors looking at the UK as a destination for outward investment, he said.
Part of the idea is to form a network of senior leaders who can advise British ministers on international trade issues.
The trade commissioners will “head the global operations of DIT, leading on export promotion, inward and outward direct investment, and trade policy overseas on behalf of the UK government,” said the spokesman.
They will be senior civil service appointments, and should be confirmed during the first half of 2018.
UK Trade Secretary Liam Fox said: “We will be seeking the brightest and the best, from both the public and private sectors. They will provide intelligence on the ground, deciding what tailored action is required in their region, and playing a vital role in our future global trading relationships,” he said.
Earlier this year, UK prime minister Theresa May said in a speech in London that Gulf states had already expressed an interest in striking deals with Britain.
A number of high-level delegations have visited the region in 2017, including Finance Minister Philip Hammond, former Prime Minister David Cameron and Prince Charles, according to a report by Forbes. The publication added that May has told GCC leaders she wants to forge a new trade arrangement for the whole of the Gulf area.
But no formal trade deal can be inked before Britain leaves the EU.
 


Saudi stocks receive landmark emerging markets upgrade from MSCI

Updated 21 June 2018
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Saudi stocks receive landmark emerging markets upgrade from MSCI

  • Market authorities in Saudi Arabia have introduced a series of reforms in the past 18 months
  • MSCI’s Emerging Market index is tracked by about $2 trillion in active and global funds

LONDON: Saudi Arabian equites are poised to attract up to $40 billion worth of foreign inflows, following a landmark decision by index provider MSCI to include the Kingdom’s stocks in its widely tracked Emerging Markets index.

"MSCI will include the MSCI Saudi Arabia Index in the MSCI Emerging Markets Index, representing on a pro forma basis a weight of approximately 2.6% of the index with 32 securities, following a two-step inclusion process," the MSCI said in a statement late on Wednesday night Riyadh time.

“Saudi Arabia’s inclusion in MSCI’s EM Index is a milestone achievement and will likely bring with it significant levels of foreign investment,” Salah Shamma, head of investment for MENA at Franklin Templeton Emerging Markets Equity, told Arab News. 

“It is a recognition of the progress Saudi Arabia has made in implementing its ambitious capital markets transformation agenda. The halo effect of such a move will be felt across the stock exchanges of the entire Gulf Cooperation Council (GCC).”

Market authorities in Saudi Arabia have introduced a series of reforms in the past 18 months to bring local capital markets more in line with international norms, including lower restrictions on international investors, and the introduction of short-selling and T+2 settlement cycles.

Such reforms prompted index provider FTSE Russell to upgrade the Kingdom to emerging market status in March, opening the country’s stocks up to billions worth of passive and active inflows from foreign investors.

MSCI’s Emerging Market index is tracked by about $2 trillion in active and global funds. The inclusion of Saudi stocks in the index, alongside FTSE Russell’s upgrade, is forecast to attract as much as $45 billion of foreign inflows from passive and active investors, according to estimates from Egyptian investment bank EFG Hermes. 

The upgrade announcement was widely expected by the region’s investment community, following a similar emerging markets upgrade announcement by fellow index provider FTSE Russell in March. 

“MSCI index inclusion will be a historic milestone for the Saudi market as it will allow for sticky institutional money to make an entry in 2019 which will help deepen the market,” said John Sfakianakis, director of economic research at the Gulf Research Center in Riyadh.