Saudi local currency Sukuk to be added to FTSE emerging markets index

RIYADH: The global index provider FTSE Russell said it will add Saudi Arabian local currency government Sukuk to the FTSE Emerging Markets Government Bond Index (EMGBI) after its market accessibility level was upgraded, Arab News reported.

Riyal-denominated Sukuk will join the EMGBI from April 2022 and will comprise 2.75 per cent of the index on a market value weighted basis, FTSE Russell said in a statement.

This step will contribute to expanding the base of investors in the financial market and improving its levels of liquidity, the Saudi Capital Market Authority (CMA) said in a separate statement.

Equities listed on the Saudi Stock Exchange (Tadawul) completed their inclusion into the MSCI Emerging Markets Index in August 2019 with a weight of 2.8 per cent after initially being upgraded in 2018, attracting billions of dollars into the Kingdom’s stocks.

In June 2020, FTSE Russell uploaded the final tranche of Saudi equities into global stocks indexes, giving it a weighting of 3.1 per cent in the FTSE Emerging Index and 0.35 per cent weight in the FTSE All-World Index.

Saudi stocks joined the S&P Dow Jones Emerging Market Indices’ (DJI) Global Benchmark Indices (BMI) in September 2019.