MSCI’s Saudi decision will be independent of Aramco listing

Global index compiler MSCI’s impending decision on whether to upgrade Saudi Arabia to emerging market status will be independent of the stock market’s ability to absorb the listing of Saudi Aramco, an MSCI executive said on Thursday.

“It is not a factor,” Robert Ansari, head of MSCI for the Middle East, told reporters at a financial conference in Abu Dhabi, when asked if the two issues were linked.

“If the Aramco IPO happens, where it lists, what and how it lists is independent of what MSCI will do to classify.”

The government plans to sell about 5 per cent of the national oil firm in the second half of 2018, hoping to raise some $100bn or more in what would likely be the world’s biggest initial public offer.

Read: Hong Kong, London, New York shortlisted for Aramco IPO

Authorities have said Aramco will be listed in Riyadh and possibly also in one or more foreign markets. The size of the IPO has raised concern among fund managers about the ability of the Saudi market, which has a capitalisation of about $470bn, to absorb it smoothly.

MSCI is expected to announce its decision in June on a potential upgrade of Saudi Arabia to emerging market status.

Read: Saudi could be upgraded to emerging markets status by MSCI in 2019