For the second quarter in a row, we saw a wide spread in performance across the MENA markets. In Tunisia, stocks remained upbeat (+22%), followed by Saudi (+12%) while Oman was down 14%. The MENA region bucked the global market trend for the second quarter in a row, backed by higher oil prices. On a year-to-date basis, the MENA region has outperformed all other regions in the world, and that by a huge margin of c15-25%.

Three years ago, Saudi opened up its stock market for foreign investment, and the reaction back then was muted. Modernizing MENA´s biggest stock market and attracting foreign investors is part of the crown prince Mohammed Bin Salman´s plan to shift the country’s economy away from oil. As a result, the much-awaited announcement from MSCI to upgrade Saudi to Emerging Market (EM) status came in June. It will be conducted over two phases in 2019 with a final weight estimated at 2.6% of MSCI Emerging Markets Index, which is estimated to lead to very sizeable inflows of c$30bn. Historically, stock markets that have been upgraded have delivered the strongest returns from the decision to implementation.

As part of the reform process underway in Saudi, another milestone was achieved as the women driving ban was removed. Several thousand women have applied for a license and comments like “And it will change things. Saudi will never be the same again.” was echoed among women in Riyadh and Saudi Arabia’s second city, Jeddah where the ban was lifted.