Saudi Arabia’s Tadawul Exchange to Launch ESG Index
Saudi Arabia’s Tadawul Stock Exchange plans to launch an ESG-themed index in Q4 2020 or Q1 2021, according to Tadawul CEO Khalid Al-Hussan. The index will be launched in cooperation with MSCI, a leading index provider and investor information and service company.
The Saudi exchange recently emerged as one of the world’s top ten by market cap, vaulted by last year’s IPO of energy giant Saudi Aramco.
“Globally we understand that ESG is becoming an investment requirement and we don’t want to be behind this in the Saudi market.”
According to Al-Hussan, the sustainability-themed index will contain at least 70 Saudi-listed companies. While the market cap of the exchange is dominated by energy companies (78% at the end of 2019), these are primarily mega-cap names with most of the exchanges roughly 200 listed companies in sectors including Banks (#2 by cap at 8%), materials (6%) and telecom (2.5%).