Saudi Arabia has earned secondary emerging market status from FTSE Russell, a designation that will introduce more money to the country and help it move away from an oil-dependent economy.
The country was previously "unclassified" by FTSE Russell, which compiles stock indexes, meaning that the country didn't get the exposure to investors that comes with being on its list of emerging markets.
Continue Reading Below
Saudi Arabia has been trying to make a number of changes to try to move away from its oil-dependent economy. As part of this, it has made some market reforms to earn this status. Saudi Arabia also is awaiting word if it will earn a similar designation by MSCI, another important index compiler.
The announcement Wednesday was not a surprise. The Tadawul All Share Index, representative of the country's sole stock exchange — the Tadawul, has been on the rise for the past year, in part on the assumption the FTSE would make this decision.
FTSE Russell said that the country will be the largest market within the Middle East of the FTSE Emerging Index.
Saudi Arabia stocks will be phased in over time, beginning in March 2019.