Strategy Note /
Global

MSCI EM Quarterly Review | February 2022

  • The Saudi market weight in the MSCI EM and MSCI ACWI remained unchanged

  • There was one addition (SRMG) and one deletion (Saudi Cement) on the standard index

  • We expect a total gross flow of SAR1.1bn-SAR1.3bn with a net inflows of SAR40-60mn (US$10-16mn)

SNB Capital
10 February 2022
Published bySNB Capital

MSCI announced the outcome of its February 2022 Quarterly Index Review (QIR), which include changes related to Saudi indices. There was one addition (SRMG) and one deletion (Saudi Cements), while Savola’s number of share has been updated. On a pro-forma basis, the Saudi market weight in the MSCI EM index is estimated to remain unchanged at 3.6%. The announced changes will be implemented on the close of 28 February 2022. On a net basis, we estimate a marginal net inflow of SAR40-60mn, with major inflow in SRMG (cSAR600mn) and outflow in Saudi Cement (cSAR300mn). The total gross flow is expected be SAR1.1bn-SAR1.3bn.

  • MSCI announced the outcome of the February 2022 Quarterly Index Review (QIR), with changes for Saudi indices to be implemented on the closing prices of 28 February 2022. There was one addition (SRMG) and one deletion (Saudi Cement) on the standard index while FIF remained unchanged for all constituents. However, Savola’s number of shares has been updated with no material impact on its weight. The total number of constituents remained at 36. We highlight that there were no additions/deletions for other regional markets, including UAE, Qatar and Kuwait.

  • The MSCI Saudi Arabia Small Cap Index had one addition and one deletion as well. SRMG was upgraded to the standard index while Saudi Cement has been downgraded to the small cap index. The total number of constituents remains at 53.

  • On a pro-forma basis, the Saudi market weight in the MSCI EM and MSCI ACWI remained unchanged at c3.6% and c0.42%, respectively. Overall, there were 16 additions, 9 deletions and 26 FIF updates in the MSCI EM index.

  • Overall, we expect a total gross flow of SAR1.1bn-SAR1.3bn with a net inflows of SAR40-60mn (US$10-16mn).

  • We estimate an inflow of cSAR600mn (cUS$160mn) in SRMG which reflects an ADTV of 16 days based on last 3 months average trading average.

  • On the other hand, we estimate a major outflow of SAR300mn (US$80mn) in Saudi Cement, equivalent to ADTV of 25 days, based on the last 3 months trading average.