Inclusion in MSCI index is a ‘big milestone’ for Saudi market, stock exchange boss says
Saudi Arabia's official inclusion on the MSCI emerging markets index is a reflection of strong investor confidence in the country's economy, the chief executive of the Saudi stock exchange said Thursday.

"This is a very important milestone because it just gives us the recognition by international investors," Khalid Al Hussan, who heads the exchange — also known as Tadawul — told CNBC's Hadley Gamble in Riyadh.

The announcement, made Wednesday, caps off a speedy 12-month exchange joining process that normally takes three to four years, the CEO said. This represented a first for the MSCI, and is expected to bolster Saudi equities.

The Saudi equity market will now represent 2.6 percent of the MSCI index, which in total is worth $1.9 billion, meaning the Saudi market's weight will be around $45 billion.

"That pool has both active and passive investors, we anticipate the passive investors to be around 25 to 30 percent, so guaranteed inflows of cash we forecast to be around $10 billion," Al Hussan said.

"This is the size of the Saudi market represented in emerging markets, guaranteed inflow of passive funds of $10 billion, and we'll work very hard with the active investors to attract the remaining investments."

Questions and concerns have been raised over governance and stability for investors in the kingdom ever since the Crown Prince Mohammad Bin Salman detained a number of wealthy nationals in the Ritz Carlton in Riyadh in November 2017. Those held were forced to hand over billions of dollars in what the government called an anti-corruption purge.

But Mohammed El-Kuwaiz, the chairman of Saudi Arabia's Capital Markets Authority (CMA), did not consider this ultimately detrimental to the country's investment attractiveness.

"Capital markets are a real-time barometer of how the investor community, local and international, views the attractiveness of investing in a country," he told CNBC on Thursday.