Our new early warning system for EM capital flows indicates that a reversal episode began on May 1, with daily data showing a sharp decline in portfolio inflows. The reversal was broad-based across EMs and affected EM Asian countries most. Outflows seem to have been triggered by the fallout from the global bond tantrum.
The decision to publish regulations governing direct ownership of shares listed on the stockmarket, Tadawul, by Qualified Foreign Financial Institutions marks an important step to open the Saudi economy to foreign equity investors. A growing allocation to Saudi stocks by global investors could translate to significant inflows within a few years if the country is eventually included in major benchmarks such as the MSCI emerging market index. Allowing ownership of shares by QFIs is intended to reduce market volatility, increase efficiency and transparency, and, ultimately, support economic growth.
IIF President and CEO, Tim Adams, gave brief welcome remarks at the IIF Colloquium on Insurance Regulation where participants would focus on systemic risk and insurance, and the international capital standard for insurers.