Strategy Note /
Saudi Arabia

Saudi Arabia: FTSE Russel Semi-Annual Review – September 2022

  • The investability weights were changed for 9 stocks.

  • On a pro-forma basis, the Saudi market weight in the FTSE Emerging Market increased from c5.3% to c5.4%.

  • For all the other stocks, the inflow/outflow is of less than 1 day based on 3 months of ADTV.

SNB Capital
5 September 2022
Published bySNB Capital

FTSE Russel announced the outcome of its September 2022 Semi-Annual Index Review (SAIR), which include changes related to Saudi indices. There was one addition (Elm) and one deletion (SPIMACO), while investability weights of 9 stocks have been changed, mainly for Dallah Healthcare, Solutions and Emaar EC. On a pro-forma basis, the Saudi market weight in FTSE Emerging Market index is estimated to marginally increase from c5.3% to c5.4%. On a net basis, we estimate an inflow of cSAR1.0bn–SAR1.2bn, with major inflows in Elm (cSAR290mn) and major outflow in SPIMACO (cSAR53mn).

  • FTSE Russel announced the outcome of its September 2022 Semi-Annual Index Review (SAIR), with changes to be implemented on the closing of 15 September 2022 for Saudi indices. There was one addition (Elm) and one deletion (SPIMACO). The total number of Saudi stocks in FTSE EM remained at 54.

  • Moreover, the investability weights were changed for 9 stocks, mainly for Dallah Healthcare, Solutions and Emaar EC.  Investability weights were also marginally reduced for Saudi Electricity, Almarai, SABB, ARNB, SADAFCO and ACWA Power.

  • On a pro-forma basis, the Saudi market weight in the FTSE Emerging Market increased from c5.3% to c5.4%.

  • Overall, we expect a total gross flow of cSAR1.0bn-cSAR1.2bn with a net inflow of cSAR800mn-cSAR900mn.

  • We estimate major inflows of cSAR300mn (cUS$80mn) in ELM, which from an ADTV perspective represents inflows equivalent to 3 days based on the average trading volumes of the last 3 months. We also expect an outflow of cSAR50mn (cUS$13mn) in SPIMACO following to the downgrade from the main index, equivalent to 6 trading days of the 3 month ADTV.

  • For all the other stocks, the inflow/outflow is of less than 1 day based on 3 months of ADTV.