MSCI (NYSE: MSCI), one of the largest providers of indexes for use with exchange traded funds, has introduced the MSCI Saudi Arabia Indexes, which are benchmarks designed to track the Middle East’s largest equity market.
“MSCI also launched the MSCI GCC Countries International Indexes, the first indexes of their kind that represent the full investable opportunity set available in the Gulf Cooperation Council (GCC) countries: Saudi Arabia, Qatar, United Arab Emirates, Kuwait, Oman and Bahrain. All indexes incorporate Saudi Arabia’s foreign ownership limit restrictions,” according to a statement issued by MSCI Monday.
Saudi Arabia will soon open its more than $500 billion equity market to foreign investors, which could prompt the launch of several Saudi Arabia-specific exchange traded funds. In May 2012, Van Eck Global, parent company of Market Vectors, filed with the Securities and Exchange Commission to market two country-specific funds focused on Saudi Arabia’s markets. [Van Eck Proposes Two Saudi Arabia ETFs]
In November 2014, BlackRock’s (NYSE: BLK) iShares unit, the world’s largest issuer of ETFs, filed plans for a Saudi Arabia ETF. Global X has also filed plans for such a fund. MSCI currently does not classify Saudi Arabia as an emerging or frontier market, however it is a member of the MSCI GCC Countries Index, according to MSCI.
MSCI is the index provider for other single-country Middle East funds, including the iShares MSCI UAE Capped ETF (NasdaqGM: UAE), iShares MSCI Israel Capped ETF (NYSEArca: EIS) and the iShares MSCI Qatar Capped ETF (NasdaqGM: QAT).
The MSCI Saudi Arabia Index will have 19 constituents while the MSCI Saudi Arabia Small-Cap Index will be home to 39 stocks, according to MSCI.
ETF Trends editorial team contributed to this post.
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