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Three Saudi Tadawul-listed companies were added to the MSCI ACWI Small Cap Index, according to the MSCI Equity Indexes February 2025 Index Review (pdf). The additions included Advanced Petrochemicals, Al Majed Oud, and Mobile Telecom, reflecting the Kingdom’s ongoing diversification efforts, with representation across retail and telecom, in addition to petrochemicals. The new additions will take effect at market close on Friday, 28 February.
An easier entry lane? The MSCI Small Cap Index includes companies that fall below MSCI’s large and mid-cap size classifications but still meet size, liquidity, and accessibility requirements, offering exposure to smaller yet investable stocks. Meanwhile, the MSCI Frontier Markets Index is designed for companies in smaller, developing economies like Morocco, where inclusion criteria are less stringent than in emerging markets.
MSCI latest index reshuffle also brought notable changes to Mena equities. DFM-listed Emaar Development was added to the MSCI Emerging Markets Index in one of its top three additions by market cap this month, reinforcing the UAE’s growing market depth and liquidity. Additionally, two Emirati companies joined the MSCI ACWI Small Cap Index (pdf), namely ADX-listed NMDC Energy and Abu Dhabi National Hotels.
Also from the region: Morocco’s CFG Bank was added to the MSCI Frontier Markets Index, reflecting the North African market’s growing financial sector influence.
Favorable sectors: Additions in the region seem to be heavily weighted toward real estate, petrochemicals, telecom, and finance, aligning with the region’s broader economic diversification plans.
Why it matters: Being added to MSCI indices can greatly ramp up the companies’ market presence, liquidity, and investor attractiveness. It’s a sign of credibility, financial health, and alignment with global investment standards. Inclusion in MSCI indices follows a rigorous selection process based on market classification, size, liquidity, and foreign accessibility. To be added, a company must first be listed in an MSCI-designated Emerging Market country, meet minimum market cap thresholds, and boast strong liquidity (with an annualized traded value ratio of at least 15%), without having major restrictions on foreign ownership.
