Saudi Stock Exchange to Launch Environmental Index with MSCI, Says CEO

The Saudi stock exchange headquarters in Riyadh. (AFP)
The Saudi stock exchange headquarters in Riyadh. (AFP)
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Saudi Stock Exchange to Launch Environmental Index with MSCI, Says CEO

The Saudi stock exchange headquarters in Riyadh. (AFP)
The Saudi stock exchange headquarters in Riyadh. (AFP)

Saudi Arabia's stock exchange (TADAWUL) plans to launch an environmental, social or governance (ESG) index in cooperation with global index provider MSCI by the fourth quarter of this year or first quarter of 2021, the bourse's chief executive said on Wednesday.

The index will include at least 70 Saudi listed companies and will be based on MSCI standards, Khalid Al-Hussan said at a virtual event.

"Globally we understand that ESG is becoming an investment requirement and we don't want to be behind this in the Saudi market," he added.

Demand for climate-friendly and sustainable investments has been on the rise over the past few years and has seen another boost during the COVID-19 pandemic, with many investors globally shifting their focus on to businesses with more sustainable, low-carbon models.

With a market capitalization of $2.5 trillion, thanks in part to the Saudi Aramco IPO in 2019, Tadawul is the world's 9th biggest stock market, ranked after the London Stock Exchange and ahead of Canada's Toronto Stock Exchange, according to World Federation of Exchanges data.

Saudi authorities have introduced a raft of reforms to attract overseas share buyers and issuers as part of efforts to attract foreign capital and diversify the oil-dependent economy.

In 2019, the Saudi market joined the FTSE Emerging All Cap Index and the MSCI Emerging Markets Index, triggering more foreign fund inflows.

The bourse also plans to issue ESG guidelines for Saudi listed corporates in the fourth quarter.



Oil Rises as Investors Weigh Market Outlook, Tariffs, Sanctions

A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk
A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk
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Oil Rises as Investors Weigh Market Outlook, Tariffs, Sanctions

A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk
A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk

Oil prices rose by around 1% on Friday as investors weighed a tight prompt market against a potential large surplus this year forecast by the IEA, while US tariffs and possible further sanctions on Russia were also in focus.

Brent crude futures were up 76 cents, or 1.11%, at $69.40 a barrel as of 1153 GMT US West Texas Intermediate crude ticked up 82 cents, or 1.23%, to $67.39 a barrel.

At those levels, Brent was headed for a 1.6% gain on the week, while WTI was up around 0.6% from last week's close.

The IEA said on Friday the global oil market may be tighter than it appears, with demand supported by peak summer refinery runs to meet travel and power-generation, Reuters reported.

Front-month September Brent contracts were trading at a $1.11 premium to October futures at 1153 GMT.

"Civilians, be they in the air or on the road, are showing a healthy willingness to travel," PVM analyst John Evans said in a note on Friday.

Prompt tightness notwithstanding, the IEA boosted its forecast for supply growth this year, while trimming its outlook for growth in demand, implying a market in surplus.

"OPEC+ will quickly and significantly turn up the oil tap. There is a threat of significant oversupply. In the short term, however, oil prices remain supported," Commerzbank analysts said in a note.

Further adding support to the short-term outlook, Russian deputy prime minister Alexander Novak said on Friday that Russia will compensate for overproduction against its OPEC+ quota this year in August-September.

"Prices have recouped some of this decline after President Trump said he plans to make a 'major' statement on Russia on Monday. This could leave the market nervous over the potential for further sanctions on Russia," ING analysts wrote in a client note.

Trump has expressed frustration with Russian President Vladimir Putin due to the lack of progress on peace with Ukraine and Russia's intensifying bombardment of Ukrainian cities.

The European Commission is set to propose a floating Russian oil price cap this week as part of a new draft sanctions package, but Russia said it has "good experience" of tackling and minimising such challenges.