Skip to content
Subscriber Only

Investors Joining Saudi Stocks' Big Moment Have to Pay a Premium

  • Valuation spread to emerging markets is the widest since 2015
  • MSCI adding kingdom to emerging markets group in two phases
Visitors stand and watch stock movements displayed inside the Saudi Stock Exchange.

Visitors stand and watch stock movements displayed inside the Saudi Stock Exchange.

Photographer: Simon Dawson/Bloomberg

Investors who are on the verge of buying Saudi Arabian shares for the first time should be ready to reach deep into their pockets.

The biggest stock market in the Arab world, which will begin to be included in the emerging-markets group by index compiler MSCI Inc. next month, is trading at the most expensive level compared with the category since 2015. The ratio of estimated price-to-earnings in the next 12 months for the main Saudi gauge is 16 times, against 12 for the MSCI Emerging Markets Index.