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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)
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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.

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Saudi Annual Inflation Eases to 2.1% in July, Lowest Since February

Riyadh, Saudi Arabia (AFP)
Riyadh, Saudi Arabia (AFP)
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Saudi Annual Inflation Eases to 2.1% in July, Lowest Since February

Riyadh, Saudi Arabia (AFP)
Riyadh, Saudi Arabia (AFP)

Saudi Arabia’s annual inflation rate slowed to 2.1% in July, down from 2.3% in June and below market expectations of 2.3%, official data showed on Thursday. It was the lowest reading since February.

Housing, water, electricity, gas and fuel prices remained the main driver of the increase, rising 5.6% year-on-year, propelled by a 6.6% jump in housing rents, the General Authority for Statistics said.

Analysts said the continued moderation in rent inflation — down from 7.6% in June — signaled progress in the government’s efforts to reform the property market and boost housing supply.

The data aligns with IMF forecasts that inflation in the kingdom will remain contained at around 2% in 2025 and 2026.

Other categories also saw increases, including food and beverages (up 1.6%), miscellaneous goods and services (4.3%), and restaurants and hotels (1.4%). Prices fell in furnishings and household equipment (-2%), clothing and footwear (-0.4%) and transport (-0.3%).

On a monthly basis, consumer prices were flat compared with June, as stability in transport, restaurants and hotels, clothing and footwear, health, communications and tobacco offset gains of 0.2% each in housing and in recreation and culture.

Abdullah al-Jassar, a member of the Saudi Association for Energy Economics, said he expected inflation to hold near current levels in 2025, with any potential interest rate cuts having limited impact.

He noted that housing-related costs, particularly rents, continued to exert strong upward pressure, with villa rents alone climbing 6.4% in July.

Imported inflation has pushed up the cost of some goods such as food and beverages, while declines in prices of other imports, including vehicles (-1.6%), have partly offset overall price pressures, al-Jassar added.

Financial and economic consultant Hussein al-Attas said the figures underscored the success of fiscal and monetary policies in containing inflation despite fluctuations in the prices of certain goods and services.

He said the rental sector remained the main inflation driver, while food prices and some consumer goods were showing signs of slower growth.

Inflation is expected to stay around 2% in the coming period, a level that supports purchasing power and investment appeal, al-Attas said, adding that authorities would continue to monitor global and domestic developments that could influence price trends.