2019 Q2 Report En · Page 5

 
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Financial Sector Development Highlights 
Implementation of Second and Third Phase Inclusion of 
Saudi Arabia into FTSE Russell Emerging Markets Index and 
First Phase of MSCI Emerging Markets Index 
On Wednesday, May 1, 2019, the second phase of Saudi Arabia's 
inclusion in the FTSE Russell Emerging Markets Index 
commenced. The tranche size for the second phase was 15%, 
bringing the total to 25%. The third phase started on Monday, 
June 24, 2019, with the tranche size of 25%, bringing the total to 
50%. The inclusion of the Saudi Stock Exchange (Tadawul) in the 
emerging markets index would take place in five tranches, with 
the final tranche ending on March 2020. Saudi Arabia is estimated 
to have an index weight of 0.25% in the FTSE Global Equity Index 
Series and 2.7% in the FTSE Emerging All Cap Index. In addition, 
the first phase of Saudi Arabia’s inclusion in the MSCI Emerging 
Markets Index started on Wednesday, May 29, 2019, and the 
second phase is expected in August this year. Saudi Arabian 
securities would represent an aggregate weight of 2.8% in the 
MSCI Emerging Markets Index after the final inclusion, which is 
the largest global index for emerging markets in size, with assets 
estimated by the index of about USD 2 trillion. Furthermore, the 
total passive inflows expected from investors following the FTSE 
Emerging Markets Index inclusion up to this phase is around SAR 
9 billion, while that from the MSCI Emerging Markets Index is 
about SAR 21.3bn billion from its first tranche.  
The Saudi Stock Exchange (Tadawul) Approved Reducing the 
Par Value of the Saudi Government Debt Instruments  
The Saudi Stock Exchange (Tadawul) issued its resolution 
approving the request submitted by the Ministry of Finance to 
reduce the par value of the domestic government debt 
instruments issued by the Saudi government, as a result of 
reducing the par value from SAR 1mn to SAR 1,000 without 
changing the size of the 29 issuances. Accordingly, this change has 
commenced from 9th June 2019. 
The Saudi Stock Exchange (Tadawul) Announced Listing and 
Trading of Government Debt Instruments in Saudi Financial 
Market 
In Q2 2019, the Saudi Stock Exchange (Tadawul) has issued its 
resolution approving the listing request of the debt instruments 
issued by the government of the Kingdom of Saudi Arabia 
submitted by the Ministry of Finance with total value of SAR 
9.25bn. Tadawul has also issued its resolution approving the 
listing request of the debt instruments from a class already listed 
with total value of SAR 7.96bn. 
The CMA Announces the Adoption of the Instructions for the 
Foreign Strategic Investors' Ownership in Listed Companies 
In continuance to the Capital Market Authority's (CMA) role to 
regulate and develop the capital market, and in its efforts to 
enhance the market's efficiency and attractiveness and to expand 
the institutional investments base. This is in line with its strategic 
plan (Financial Leadership Program) and the objectives of the 
Financial Sector Development Program (FSDP). The CMA Board 
has issued its decision to adopt the instructions for the foreign 
strategic investors' ownership in listed companies to be effective 
as of the date of their publication.  
The Growth of Foreign Investors Ownership and The Volume
of Foreign Investor Trading in the Saudi Stock Market  
The implementation of the second and third phase of the plan to 
join FTSE Russell Emerging Markets Index and the first phase of