DUBAI: Saudi Arabia has been the best performing of all the emerging markets since the onset of the pandemic, according to new data from global information provider Refinitiv.
An analysis of 25 countries in the MSCI Emerging Market Index put Saudi Arabia, home to the Tadawul stock exchange in Riyadh, at the top of the list with a near 27 percent rise in market value since the start of 2020, when COVID-19 began to impact the global economy.
That compares with an average increase of just 1.6 percent in the overall index, and easily outstrips the 14.2 percent jump in the MSCI World Index of all countries.
Turkey was the worst performing of the emerging markets, with a 22.8 percent fall since the pandemic began, followed by Peru and Colombia, with drops of more than 20 percent. Of the other Middle East countries, Egypt witnessed a 6.5 percent decline, while Qatar barely grew, with just a 1.2 percent increase.
The UAE placed second in the post-pandemic emerging market ranking, with a 21.3 percent rise.
Market experts said one of the reasons for the Kingdom’s outperformance was the authorities’ effective response to the economic recession brought on by the pandemic.
“The Saudi authorities were relatively quick to react with a series of measures, especially relating to smaller businesses, to help ease the burden of the pandemic economic effects, and the market has reacted to that,” Tarek Fadlallah, chief executive of Nomura Asset Management in the Middle East, told Arab News.
The International Monetary Fund recently applauded the Kingdom’s pandemic response, as well as reforms to its capital markets that have enhanced its position as the biggest equities trading hub in the Gulf.
Tadawul has introduced derivatives trading which has broadened its appeal, especially to foreign investors accustomed to more sophisticated trading techniques.
“Saudi Arabia’s market outperformance and strong corporate valuations reflect its sustained course of economic transformation, along with liquidity boosting by the central bank,” financial expert Nasser Saidi told Arab News.
“Economic and structural reforms, along with social liberalization policies, including opening up foreign markets to foreign investors, allowing for 100 percent foreign ownership in certain sectors, resulted in massive investment inflows.”
He highlighted the effect of the “policy-shattering” initial public offering of Saudi Aramco, and the steady stream of market flotations continuing this year, as a key feature of the Kingdom’s progress since the pandemic began.
The Saudi performance rates highly even in the context of rising global markets, buoyed by low interest rates and big government stimulus. New York’s S&P index has gained 33 percent since the onset of the pandemic.