Saudi Arabia, Argentina to be part of MSCI emerging markets index


This is bloomberg daybreak middle east now etf striking argentinian and saudi arabians stocks climbed in late trading a new york after msci gave the two countries emerging market status they'll be added to indexes in about a year joining nations including china india turkey and brazil the decision may boost the argentine peso when trading resumes of course argentina is now in the position of getting an imf credit line and an index upgrades all in the same month let's get more with managed to get us for emerging markets justin kerrigan and middle east stocks are beautifully pay pacheco just let's come to you i often tina's inclusion is that more of a surprise given what we've heard very recently about their conversations with the with the imf more of a surprise than the inclusion of saudi i would say so yes in fact i think merrill lynch carried out a survey prior to this decision which stay found that about thirty thirty five percent of respondents felt that our gen tina would get included and i think the proportions for saudi arabia were much larger so yes this is more of a surprise and it's a piece of good news the argentina desperately needs right now and really talks to the efforts of the macrey administration in trying to turn round the argentine economy scrapping capital controls three years ago and moving towards meeting the conditions msci required for giving them back the emerging market status that is so coveted because don't forget it lost it nine years ago so it's back again in that fold just how whole father let's go to philippi philippi saudi arabians had a cracking run the moneys flowed in week after week they've been ahead of the curve in this one of the remaining challenges for the saudi market to keep that kind of momentum ongoing is it about foreign ownership what is the crux the next move that's correct as you said we've seen a lot of flows going into saudi stocks this year the index is one of the best performing in this is so far and we have a lot of expectations about this market they've done pretty much everything they needed to get this very important classification and now people are asking what's next for saudi there's when we talk to foreign investors to those that are not used to the middle east as as unethical as to as it's in the region they say for example that corporate governance is that they would like to see proven in the region that they would like to see better disclosing better communication between the companies and investors in general so maybe this would be a very good way to start for companies that are already listed in the two doe in riyadh who which are expected to be included in this emerging market indices index by now they could be better communicating and actually showing to the road what they're doing over and philip af international investors looking at saudi arabia as a result of this for the first time we'll maybe revisiting this as an investment destination where can they find which sectors will companies can they find high of transparency where can they find high a free float the things that international investors as you say have been looking for that's a very good point is what we have to remember that this market was basically completely shut to international investors in two three years ago that's when the government started to implement a series of reforms that resulted right now in this important classification when we talked to foreigners many of them mission banks for example let's a sector that's expected to benefit a lot of pickup in the economy in saudi which is not doing great by the way we know that it's it's a big country it's extremely important when it comes to to the oil industry and oil is important for the country but the economy's not doing great if we see a better outlook for oil and pika in the economy banks would be the first to benefit and that's a very big sector treated in riyadh petrochem would also be on the top of the list of most of the people that are actually starting to play the inclusion right now just let's just bring it back to you very briefly i'm looking at w c o rest the argentinian peso i mean it is a war zone of your brave fx traitor i smash dawn thirty three percent does this could this will this change any of the direction algae and flow into argentina we've got this fifty billion dollar lifeline of course from.

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