Riyadh – Mubasher: The expected listing of the Saudi Stock Exchange (Tadawul) under the FTSE Emerging Markets index (FTSE EM index) is likely to bring up to $3 billion investments, according to a recent report by NCB Capital.

The FTSE EM index currently has a free float market cap of $5,165 billion, the report added.

NCB Capital said that the potential upgrade to FTSE EM index will be decided by then end of March 2018; this promotion means that Tadawul will be part of the FTSE Global All Cap index with a free float market cap of $52,424 billion and assets worth $361 billion of benchmarked to it. Saudi is expected to have a weight of 0.21% in this index.

In September 2015, Saudi was placed on the watch list to be included in the FTSE EM index, which covers 992 stocks across 23 countries, with $115 billion assets benchmarked to it. Saudi is expected to have a weight of 1.97% in this index.

“FTSE Russell stated that the recent market reforms in Saudi are widely acknowledged as being positive. As a result, it is anticipated that Saudi will meet the requirements for inclusion as a Secondary Emerging market from early 2018 and its status will be reviewed in March 2018,” NCB Capital’s report said.

The report clarified that an alternative scenario might be a gradual upgrade.

“We anticipate a majority of incoming will flow to large cap stock, with the top 10 stocks listed in exhibit 2,” NCB Capital said.