The upgrade of Saudi stock exchange, Tadawul, to the status of an emerging market by global index provider MSCI is a step expected to attract up to $45 billion in foreign investments and to expand liquidity base in the Saudi bourse. Mohammed el-Kuwaiz, chairman of the Capital Market Authority (CMA), said on Thursday that the decision would increase foreign flows, especially in the run up to an expected IPO of Saudi Aramco. MSCIs decision comes three months after another index provider, FTSE Russell, also gave Saudi Arabia emerging market status. “We are proud of this achievement, which shall enhance the diversity of the investors’ base as well as the liquidity of the Saudi Capital Market," Kuwaiz told a press conference held in the Saudi capital Riyadh. Chairwoman of Tadawul Sarah al-Suhaimi also congratulated the Saudi exchange on joining the MSCI index, which is “the most prominent international indices, and which directly follows our success in joining FTSE Resal Emerging Markets Index, reflecting the competitiveness of the Saudi stock market among global financial markets.” "Inclusion in the MSCI Emerging Market Index is an important milestone and further affirmation of the tremendous progress Tadawul has made in the past year," said its CEO, Khalid al-Hussan. “By supporting the inclusion of Saudi Arabia and Argentina in Emerging Markets, international institutional investors confirmed that they are now able and ready to access and operate in these markets,” said Sebastien Lieblich, MSCI Managing Director and Global Head of Equity Solutions. “These inclusions will result in the expansion of the global investment opportunity set and allow for greater diversity in the MSCI Emerging Markets Index, which is important to investors.” “International investors were impressed by the speed of change in the accessibility of the Saudi Arabian equity market and the level of commitment that the Capital Market Authority (CMA) and the Saudi Stock Exchange (Tadawul) have demonstrated. Their expectation now is that the current privatization effort in Saudi Arabia will continue to grow the investable opportunity set available to them and hence, all other things being equal, contribute to an increased weight of Saudi Arabia in the Emerging Markets Index in the future,” Lieblich added.