LONDON: Index compiler MSCI will consult with investors about adding Saudi Arabia to its broader stock indices and could make a decision to include it as an emerging market in June 2015, an MSCI official said.

Saudi Arabia plans to open its stock market to direct investment by foreign financial institutions in the first half of next year, the market regulator said.

Sebastien Lieblich, executive director in the index research team at MSCI, said MSCI would wait for the changes to be implemented before consulting investors, with a decision as to whether to include it as emerging market unlikely to be made before June 2015.

“We need to be convinced that everything is at emerging market standards,” he said.

If Saudi Arabia only partially opens up to foreign investors, in the same way as the Chinese domestic “A” share market, it would likely be a standalone index, Lieblich added.

The main Saudi index jumped 2.8 percent, its biggest rise since last October, to a fresh six-year closing high of 10,025 points.

SABIC surged 6.9 percent. “SABIC will be the biggest attractor of foreign capital,” said Daniel Broby, chief executive of Gemfonds, a fund manager company which focuses on emerging markets.

“Regardless of the depth of its market, Tadawul (the Saudi bourse) will be viewed by foreign investors as a petrochemicals play.”

Shares in Yanbu National Petrochemicals (Yansab) 2290.SE, a SABIC subsidiary which Broby said was more attractive from a valuation perspective, gained 2.9 percent.

Among other blue chips, mobile telecommunications operator Etihad Etisalat (Mobily) 7020.SE rose 5.1 percent, while Al Rajhi Bank 1120.SE, the kingdom’s biggest listed lender, added 2.2 percent.

“Etihad Etisalat is the short-term play. (It is) on a price to earnings ratio of 10 which is low for a wireless company with growth prospects and is substantially off its high,” Broby said.

Stocks other than blue chips could also benefit from the market opening, however. At present, foreign investors other than citizens of neighboring Gulf states are limited to buying Saudi stocks through swaps or exchange-traded funds; the cost of swaps makes it uneconomic to invest in some smaller companies.

Among the smaller counters, “one we like is Red Sea Housing, which is a global leader in prefabricated housing,” Broby said. The stock edged up 0.03 percent.