skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

Data from EPFR shows that interest in Saudi Arabian equities has really picked up in 2018, whilst the country's benchmark Tadawul All-Share Index has surged 7.5%. This has primarily been driven by three factors:

  • The expected inclusion of Saudi Arabian stocks into the FTSE Russell EM Index in March and then the larger MSCI EM Index in June.
  • Planned SOE privatisations, which includes the potential USD2tn IPO of Saudi Aramco. The Saudi government plans to increase the number of companies listed on its stock market by nearly 50%, from 170 to 250 companies over the next four years, with an 80-strong IPO pipeline.
  • The ambitious Saudi 2030 vision (first announced in 2016) that looks to open up the country's capital markets and reduce the country's oil dependence, which supports the longer-term investment case for the Kingdom. This was needed after a plunge in crude prices crippled the nation's finances.

Based on this, we recommend a LONG POSITION in the iShares Saudi ETF as history suggests that ahead of the June announcement from the MSCI and in the weeks after actual inclusion, the Saudi stock rally will continue, driven by inflows.

We also believe that Saudi stocks offer a longer-term bullish narrative and we suggest remaining LONG SAUDI STOCKS targeting a climb in the Tadawul All-Share Index to 8,497 area in the long-term.

The full report explores the recent flows into Saudi Arabian equities, looks at the previous impact of EM index inclusion on country stock markets and explores in detail the above bullish Saudi Arabian stock market trade ideas. To access this report please click on the attached PDF below;

Saudi_Arabia_EM_Status_Mar2018.pdf


Fundamentals: christopher.shiells@informagm.com and robert.graystone@informagm.com

Technicals: andrew.dowdell@informagm.com

Recommended Articles

  • IGM FX and Rates

    China Insight: From Peking Founder to MPA loosening

    20 Feb 2020

    China Insight: From Peking Founder to MPA loosening

  • IGM Credit, IGM FX and Rates

    The Context 02.18.20

    18 Feb 2020

    Inside this week’s edition of The Context, Financial Intelligence thought leaders discuss: The JPY Week - Bias is Bearish Has the impact of coronavirus now peaked? We say such talk is premature and an underlying bid Usd/Jpy will continue to slow into 110.00-plus. Euro FIG Snapshot: Virus Protection Fully Operational With the recovery in risk assets extending into a second week, more issuers emerging from blackout and the credit market's virus protection evidently up to date, the pace picked up in the non-covered primary FIG market last week. Equities Ignore, Hope … Euro Indicates Slowing EMU Economy It doesn’t take much to light a fire under equities, but it is going to take much more to push bond yields higher... Read more from The Context and subscribe to have it delivered to your inbox each week!

    Topics Industry News

  • IGM Credit, IGM FX and Rates

    China Insight: Credit Bonds Will Play Catch up on More Supportive Measures

    By Tim Cheung 18 Feb 2020

    The authorities, MOF, PBOC and CBIRC, hosted a joint conference on Feb 7 to provide an update on supportive policies in light of the coronavirus situation. We believe the conference delivered a loosening bias tone as a nimble response to the virus outbreak. Next move following the huge liquidity injection and provision of first batch of special relending funds to more than a dozen of banks is going to be an LPR cut on 20 Feb. We expect a 10bp cut in both 1-year and 5-year LPRs on 20 Feb (chart 1), similar to the magnitude of the latest OMO rate cut. A more sizable cut may mean the policymakers are opting for more aggressive monetary easing to cushion the economic shocks arising from the coronavirus outbreak.      

    Topics Industry News

;

Any questions? Speak to a specialist

Would you like to request sample data or analysis from Informa Financial Intelligence? 

See how our tailored solutions can help you gain a competitive advantage: