Few expect Saudi to join EM index next year

IndicesOnly 16% of fund managers and investors in a survey expect Saudi Arabia to join the MSCI Emerging Markets index next year. A larger proportion, 27%, believe the country will not enter the index until after 2020. Over a third, 34%, predict it will join the widely followed index in 2019. “Very few participants expect Saudi Arabia to join MSCI EM by 2018,” remarked EFG Hermes, the investment firm that carried out the survey. MSCI recently stated that Saudi Arabia had made progress in meeting the standards required for membership of the Emerging Markets index. A planned move to a two-day settlement cycle and a proposed delivery-versus-payment system were highlighted by the index provider. However, MSCI also said it will be June at the earliest before its review of the country's suitability begins, with 2018 the earliest Saudi Arabia could enter the index. MSCI's decision will depend on the feedback of market participants. EFG Hermes polled 510 international fund managers and institutional investors at a conference in Dubai. ©2017 funds global mena

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