Saudi Tadawul expects $3bn additional inflows from FTSE inclusion: chairwoman

The Middle East’s largest bourse is expected to launch the first exchange-traded derivative product in the fourth quarter of 2019. (Reuters)
Updated 11 September 2019

Saudi Tadawul expects $3bn additional inflows from FTSE inclusion: chairwoman

RIYADH: The Saudi Stock Exchange (Tadawul) expects additional passive funds’ inflows worth $3 billion from the remaining phases of inclusion in the FTSE Russell emerging market index starting in September, its chairwoman said.
The Middle East’s largest bourse is also expected to launch the first exchange-traded derivative product — an index futures contract based on the MSCI Tadawul 30 Index — in the fourth quarter of 2019, Sarah Al-Suhaimi said.
The kingdom opened its stock market to foreign investors in 2015. It has since introduced a raft of reforms to make it attractive to foreign investors and issuers and to expand its institutional investor base, as part of an ambitious plan to diversify the economy away from hydrocarbons.
The Saudi inclusion in emerging markets indices has generated foreign inflows worth billions of dollars since the start of the year, and is expected to facilitate Riyadh’s plans to sell about 5 percent of its oil giant Aramco in an IPO and reinvest the proceeds in new industries.
Inflows of foreign funds will help absorb the huge IPO, especially with an increasing likelihood of a domestic listing on the Riyadh bourse followed by a later international offering.
In August, the Saudi exchange completed the second and final phase of joining the MSCI Emerging Markets Index, raising its weight on the closely-monitored index to 2.8 percent.
“Since the beginning of this year, foreign investors have traded more than $65 billion and have been net buyers of more than $20 billion of Tadawul-listed shares through August 29,” Suhaimi said in an emailed response to Reuters inquiries.
Suhaimi said the number of qualified foreign investors (QFIs) has “grown exponentially” by 200 percent year-to-date, reaching more than 1,300 and is set to grow further by the end of 2019.
“The additional passive inflows from the remaining tranches of FTSE inclusion is expected to be around $3 billion,” she said.
“Tadawul is in the final implementation phase of establishing a Derivatives Market and is actively working on market readiness from a technology, trading and business perspective. We expect to launch the first exchange-traded derivative product – an index futures contract based on the MSCI Tadawul 30 Index — in the fourth quarter of 2019.”
She said the Saudi market will continue to be of interest to international investors despite heightened volatility in global markets due to trade conflicts and political concerns.
“Foreign investors ownership percentage is now at 8.3 percent, that is 76 percent growth year-to-date. Additionally, Saudi market performance year-to-date has been positive at 4.8 percent growth while FTSE EM only grew by 1.76 percent and MSCI EM declined by -0.15 percent for the same period,” she said.


Getting more women into leadership positions top priority: CEO

This June 23, 2018 photo, shows a general view of Riyadh, Saudi Arabia. (AP)
Updated 18 January 2020

Getting more women into leadership positions top priority: CEO

  • Saudi Arabia is focusing on the Business 20 (B20), making this one of the key engagement groups. Women in Business will be Saudi Arabia’s signature topic

RIYADH: The boss of one of Saudi Arabia’s biggest banks says that getting more women into leadership positions is a top priority.
Samba CEO Rania Nashar chairs the action council for Women in Business created by the Business Twenty (B20), which is the official G20 dialogue with the business community. It represents the global business community across all G20 member states and all economic sectors.
She said the council was set up to boost women’s particpation not only in business but also in global leadership positions.
During the launch of the B20 in Saudi Arabia this week, Nashar highlighted the under-representation of women in the economy.
“There is a gap of 27 percent between male and female workers; 75 percent of males are part of the labor force while only 48 percent of females are working,” she said.
She said it was important not to just talk about women as workers but as business owners.

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Saudi Arabia will host the 15th G20 Summit in Riyadh on Nov. 21-22, 2020.

“That’s why entrepreneurship is very fundamental to our task force,” she said.  “The majority of the finance development programs have incentives for giving loans to females; however, despite the fact that many large borrowers are females, the amount of loans granted to them is far below what is granted to males,” she added.
Nashar said that two-thirds of female business founders feel that they were not taken seriously by investors when they pitch for investments. They also feel that they are treated differently from their male counterparts.
Saudi Arabia will host the 15th G20 Summit in Riyadh on Nov. 21-22, 2020. The Kingdom is focusing on the Business 20 (B20), making this one of the key engagement groups. Women in Business will be Saudi Arabia’s signature topic.