- JPMorgan Chase & Co. is contemplating the addition of Saudi Arabia's local-currency bonds to its benchmark emerging-market index. This potential move aims to facilitate increased foreign portfolio investment and funding for the Kingdom's substantial diversification projects away from oil.
- Saudi Arabia is spending hundreds of billions of dollars on an economic diversification drive led by Crown Prince Mohammed bin Salman, known as “Vision 2030.” While some of this will be financed by oil revenues, the government aims to attract more foreign investment.
Why it matters
If included, this change could enhance the liquidity of Saudi government securities and draw more passive funds that typically follow indexes like JPMorgan's. Such an inclusion would potentially be advantageous for Saudi Arabia, in attracting significant foreign direct investment or overseas investment in its debt market.