Riyadh – Mubasher: Global equity index compiler S&P Dow Jones Indices will upgrade the Saudi Stock Exchange (Tadawul) to emerging market status from a stand-alone market next year, after wrapping up a consultation with the investment community's members on the potential change.

Becoming the latest in a series of index firms to promote Riyadh, the New York-based firm's decision came in response to the kingdom's economic reforms implemented to attract more foreign investments, according to a statement.

The amendment of the GCC nation’s stock exchange will be carried out on two phases: the first will be in line with the quarterly review next March, while the second will be in September 2019 with the annual reconstitution.

“At each of these points, stocks that are current constituents of the S&P Saudi Arabia BMI will become eligible for certain global benchmark index families,” the statement concluded.

In March, FTSE Russell decided to upgrade Saudi Arabia to an emerging market in 2019. Fund managers expect this move to lure about $5bn of “passive”, index-linked money to the bourse. MSCI made a similar decision in June, an MSCI upgrade could attract around $10bn of passive funds.