Riyadh: In a revelation from Richard Cormack, Co-Head of Equity Capital Markets EMEA, Co-Head of UK Investment Banking at Goldman Sachs, the MENA region is anticipated to represent 10% of MSCI EM. Notably, Saudi Arabia is projected to make up a substantial 70% share of this, marking a significant development in the financial landscape.
Cormack, speaking at the third Edition of the Saudi Capital Market Forum, highlighted the outcomes of a recent research report by Goldman Sachs. According to the findings released today, this projection would position the MENA region in parallel with Latin America, emerging as a substantial block – the largest outside of Asia.
During the panel discussion, Cormack underlined that such a scenario would translate into substantial financial movements, both passively and actively. The anticipated impact amounts to approximately AED 184 billion over time, marking a noteworthy economic shift in the region.
Furthermore, Cormack emphasized Saudi Arabia's impressive standing in the global market, stating that it competes closely with developed markets. A key factor contributing to this is the attractive multiple at which Saudi Arabia trades, with a market Price-to-Earnings (PE) ratio hovering around 21 times. This aligns with the market PE in the United States, underlining the attractiveness and competitiveness of the Saudi market.
The assertion made by Cormack carries weight, considering Goldman Sachs' prominent position in global financial markets and the rigorous research backing the predictions. The MENA region's potential ascent to a 10% share in MSCI EM, with Saudi Arabia spearheading with 70%, signals a substantial transformation in the investment landscape.
As investors increasingly seek opportunities in emerging markets, Saudi Arabia's prominence and alignment with developed markets present a compelling case. The region's growth potential, coupled with the strategic positioning of Saudi Arabia, could make it a focal point for global investors looking to diversify their portfolios.