Riyadh, (Business News Report)|| Saudi shares began trading on the MSCI index, which took place in the middle of last month.
The Associate Director of Strategic Research at Beltone Financial Holding Company, Ahmed Hisham, said that the MSCI index concluded the results of the semi-annual review of the index in May 2022 for the Kingdom of Saudi Arabia.
The index for Saudi Arabia witnessed the deletion of Abdullah Al-Othaim Markets Company, which represented 0.4% of the relative weight within the index, and the Cooperative Insurance Company with almost the same weight.
ACWA Power, which will have an initial relative weight of 1.6%, and the Saudi Investment Bank, with an initial weight of 0.6%, as well as a trading company with an initial weight of 0.6%, and a flag with an expected weight of 0.5% were added.
As a result, Hisham expected that the MSCI Saudi Arabia Standard Index will witness a change in the relative weights of some stocks already included in the index, as the relative weight of Al-Rajhi Bank will decrease from 17.2% to 16.8%.
On the other hand, Abdullah Al-Othaim Markets Company will join the index of small capital companies, with an initial weight of 4.1%, while the initial weight of the Tawuniya is expected to be 3.2% after adding it to the same index.
They will also be joined by Arabian Technical Contracting with a starting weight of 1.5%, Chemanol with a starting weight of 1.3%, Al-Munajm Food with a starting weight of 1.1%, Theeb Rent a Car with a starting weight of 1%, Nayifat with a starting weight of 0.9, and Sasco with a starting weight of 0.9%.
Meanwhile, MEPCO’s share will be the last to join the index of small capital companies, with an initial weight of 0.7%, an index that did not witness any deletions during the last review.
The importance of the index is that many sovereign funds, which exceed a group of funds managed by several trillion dollars, track MSCI indices, and allocate funds according to the relative weight of each market, and the relative weight of stocks within each sub-index.
In total, the Saudi market witnessed the addition of 12 new companies to the MSCI indices, where 3 companies joined the benchmark index, with the deletion of two companies.
Meanwhile nine companies were added to the MSCI Small Caps Index, but none of them were deleted.
The analyst at Beltone also believes that in most cases, companies joining MSCI’s emerging market indices are positive on their performance in the short term, with foreign capital flows into stocks to rebalance.