Saudi MSCI upgrade to attract $45b, UBS says

The decision by index compiler MSCI to include Saudi Arabia in its Emerging Markets (EM) index is expected to attract around $45 billion (Dh165 billion) to the kingdom’s markets, according to UBS.

Reports from the Swiss investment bank’s global wealth management unit said that $10 billion of those funds will come from passive investments while the other $35 billion will be from active investments.

Rival index provider FTSE’s recent inclusion of Saudi Arabia in its own EM index earlier this year is estimated to add another $5 billion of inflows, UBS said. This increases the chances of further near-term outperformance for the country.

The figures support reports from the Saudi Capital Market Authority (CMA) that said in late June that the MSCI EM inclusion could attract around $40 billion from international funds. CMA said around $10 billion of those would come from passive funds.