Saudi Arabia's stock market has risen by around 8 percent since the beginning of 2018 and is currently trading at levels last seen back in August 2015, according to analysts.
A report on the Tadawul All Share Index (TASI) by Jadwa Investment said that in the last few months a number of positive developments have lifted investor sentiment in the Gulf kingdom and led to an improvement in the performance of the market.
"Whilst multi-year high oil prices have no doubt firmed up sentiment, this is only part of the story. Investor confidence has also been buoyed by the recent clarity and direction of economic policy, as well as Saudi Arabia’s expected inclusion, which later materialized, into the FTSE Emerging Market (EM) index," Jadwa said.
It added that the promotion to EM status marks a key milestone for Saudi Arabia and rewards the depth and pace of reform that has taken place with the kingdom’s capital markets in the last few years.
Jadwa also estimated that the inclusion of Tadawul into FTSE EM, once completed in December 2019, is expected to attract around $5 billion in passive inflows.
It added that the inclusion into FTSE EM has also encouraged record buying by foreigners.
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