Saudi’s MSCI inclusion to benefit UAE, GCC equities
dubai — The Saudi stock market’s inclusion in MSCI’s Emerging Markets Index will result in $4 billion (Dh14.68 billion) flowing into the Kingdom’s equity markets and its spill-over effects will also be felt in the UAE and other GCC markets as well, said Tariq bin Hendi, acting chief investment officer, Emirates NBD Group.
Speaking to the media on Monday, he said Saudi inclusion in MSCI’s EM Index and Aramco’s IPO will be the two major catalysts for the regional equities this year.
“In 2013, from the time announcement was made about UAE’s inclusion in MSCI index to the time of inclusion, there was 100 per cent increase in value and upward movement of the market. If Saudi is also included in MSCI index, and we hope that the announcement will be positive, with around 2.5-3 per cent weightage on the index, this will translate to approximately $4 billion flowing into that market,” he said.
“Even the trickle effect of Saudi Arabia’s inclusion in MSCI on the UAE, Bahrain, Kuwait and other regional bourses will be tremendous. In addition, Aramaco’s IPO will also be very, very good for the GCC equities,” said Bin Hendi, who is executive vice-president and head of products and advisory. Emirates NBD CIO is also quite positive about GCC banks, Dubai real estate, healthcare and logistics stocks for 2018.
Cryptocurrencies
Commenting on cryptocurrencies and blockchain, Bin Hendi pointed out that there is a lot of momentum behind the two new fast-evolving technologies and the regulators.
Even GCC regulators will also have some legal framework soon about the new evolving technologies. “I know that it (framework) is under review.”
The UAE Central Bank Governor Mubarak Rashed Al Mansouri said
saudi inclusion in MSCI’s Em Index and aramco’s IPO will be the two major catalysts for regional equities this year
Tariq bin Hendi, Acting chief investment officer, Emirates NBD Group
in December that the UAE is working with Saudi central bank to issue a digital currency that would be accepted in cross-border transactions between the two countries. However, Emirates NBD CIO is not actively recommending any individual cryptos at the moment considering non-regulations and volatility in the trading of their trade.
“We aren’t actively recommending any cryptos. Financial institutions are saying that it is fraud and the same financial institutions are claiming and publishing bibles on how cryptos are going to be there as a new assets class. So, there is a lot of mix messaging in the market.
“Some of the Noble Prize winners are dismissing blockchain and cryptos; they are the same people that dismissed the internet in ’90s. They thought only handful of people will use it. I am not saying that they are incorrect today, but they were definitely wrong in early ’90s. This is an evolving technology, blockchain is going to evolve how things work and individual cryptor to be determined once regulators come in. Then you could see some less volatility in the market,” he told media during the briefing on Monday.
However, he noted that Ripple technology is going to be very beneficial for blockchain sentiment globally. “If you look at the amount of press that Ripple is getting in terms of adopting and regulators looking at working with Ripple, I don’t understand why their token is trading at $100 or $200.”
On Monday, Ripple was trading up 2.11 per cent at $1.15.
— waheedabbas@khaleejtimes.com