Riyadh - Mubasher: The Financial Times Stock Exchange Index (FTSE Russell) has announced that Saudi Arabia will be assigned a secondary emerging market status within the index’s country classification scheme conjunction commencing in March 2019.

Saudi Arabia was added to the watch list in September 2015 following the introduction of a qualified foreign investor (QFI) scheme, according to an official statement.

The Capital Market Authority of Saudi Arabia and the Saudi Arabia Stock Exchange (Tadawul) recently introduced a number of improvements to the market infrastructure aimed at opening up the domestic market to international investors.

These measurements included, but were not limited to the simplification of the QFI registration process and enhancements to the Independent Custody Model (ICM), which included the introduction of a T+2 settlement cycle with a Delivery versus Payment (DvP) model in April 2017.

Saudi Arabia is projected to have an index weight within FTSE GEIS of 0.25% and 2.7% within the FTSE Emerging Index.

Due to this projected size in the Emerging index, FTSE Russell proposes to implement the inclusion of Saudi Arabia in several tranches to ensure mechanisms are operating as expected, thereby minimizing price pressure on new constituents and to spread outflows from those markets being sold down.

The implementation of Saudi Arabia into FTSE GEIS will commence in conjunction with the March 2019 semi-annual review and being completed by December 2019.

The initial 25% tranche will be split over March and April 2019 to ensure a smooth phasing in of Saudi Arabia.

The remaining 75% will be implemented in conjunction with the quarterly reviews in June, September and December 2019.