The Saudi Stock Exchange, or Tadawul, will open its doors to direct investment by foreign institutional investors on June 15. This move will change the face of investing in the Middle East. With a stock market capitalisation of around USD 528 billion, or some two thirds of Saudi GDP, the Tadawul is almost the same size as all the Gulf equity markets combined. It is both larger than the Mexican stock market and ranks amongst the ten largest emerging markets stock exchanges. It’s big, it’s liquid and it will be important for emerging markets investors.

The game will change once again when the country enters the list of either MSCI emerging or frontier markets. But we’ll probably have to wait ‘til 2017 to see this happen.

Largest Emerging Markets Stock Exchanges
Domestic Equity Market Capitalization (ex-China: USD Billion – 31 March 2015)

*Taiwan + Taipei exchanges
Source: The World Federation of Exchanges Ltd

About the Author:
Mr. Semple is a portfolio manager at VanEck. Prior to joining Van Eck in 1998, he served as portfolio manager at Peregrine Asset Management, which sub-advised the Van Eck VIP Emerging Markets Fund. From 1993 to 1996, he served as sales director and regional strategist at Peregrine Brokerage. Prior to 1993, Mr. Semple was a portfolio manager specialising in Asia ex-Japan equity markets at Murray Johnstone, a United Kingdom investment management company.

The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.