MSCI quarterly rebalancing includes seven fresh additions of domestic players across two EM indexes

Al Jouf Agricultural, Herfy Food, and Sinad Holding were removed from the small-cap index

Global index builder MSCI unveiled its upcoming quarterly balancing of the GCC standards and small-cap indices, with several high-profile inclusions slated to take effect after market close on Friday, 30 May. Saudi Arabia and the UAE emerged as the largest beneficiaries of the fresh index weight.

In the MSCI Saudi Arabia Standard Index, Jabal Omar Development and Makkah Construction and Development Company will be added, according to a statement (pdf). Both are big players in the Kingdom’s construction, real estate, and hospitality sectors and are closely linked to our tourism ambitions and urban development drive. None were removed.

Why it matters: Being added to an MSCI index basically means the company has met certain global standards for metrics, including market cap and liquidity, which puts it on the radar of international investors. It’s also a way for getting a stock picked up by global funds and ETFs, which could lead to stronger investor demand for the stock, giving the constituent more visibility and credibility in international markets.

The small-cap index will see five additions across the healthcare, energy, infrastructure, and consumer sectors, including Almoosa Health, Arabian Drilling, Knowledge Economic City, Nice One Beauty, and United International Holding, according to a separate statement (pdf). Meanwhile, Al Jouf Agriculture, Herfy Food Services, and Sinad Holding were removed.

The regional picture: Across the rest of the region, a total of five Emirati companies were added and none were removed, while a total of two companies in Oman were added and three were removed from both indices.