INSUBCONTINENT EXCLUSIVE:
MSCI, the world's biggest index provider, will follow in the footsteps of S-P Dow Jones and FTSE Russell, which told clients this week
that they could fast-track Saudi Aramco's inclusion into their indexes as soon as December.
Typically, providers of indexes which are
tracked or used as a benchmark by investment funds would add newly listed companies during their rebalancing reviews, conducted quarterly or
semi-annually, depending on the index.
State-owned Saudi Aramco, the world's most profitable company, is set to launch a share sale
17, aiming to raise $20 billion-$40 billion in a domestic initial public offering (IPO) in early December.
The oil giant is due to announce
the pricing of its IPO on Nov
17, but it is unclear whether more details around timing will be disclosed.
While a large part of the offer is set to be sold to retail
investors, when the company is added to the global indexes and what proportion of them it will account for will influence demand for the
shares from overseas money managers, particularly now that Saudi Arabia has been classified as an 'emerging market'.
MSCI, whose indexes are
used by funds with trillions of dollars in assets globally, said that if Saudi Aramco starts trading on or before Dec
12, it would add it to the MSCI Equity Indexes from Dec
17.
"However, if the IPO listing date is after December 12, 2019, MSCI would postpone the implementation until after January 5, 2020," it
said in a note to clients on Friday night.
It added that it would do so to avoid lower liquidity during the Christmas period, when trading