Saudi Aramco shares advance for a third session — though the market valuation remained below $2 trillion — with investors focusing on energy company’s inclusion in major global equity indexes this week.
The stock climbed 1.6% in Riyadh, extending gains since it started trading on Wednesday to 17%. The main Saudi index also advanced, along with most peers in the Middle East, as they caught up with global markets after the US and China agreed on a phase-one trade deal last week.
MSCI Inc., which compiles the most popular emerging-market equities index, will add Aramco to its benchmarks using the closing price of December 17. FTSE Russell will follow suit using the price of December 19.
Aramco’s addition will probably trigger about $1.16 billion of flows into the stock, according to Arqaam Capital. EFG-Hermes foresees passive inflows of as much as $1.24 billion.
Aramco closes at 37.40 riyals. The Tadawul All Share Index advanced 0.6%. The company needs a price of 37.50 riyals for a market valuation of $2 trillion.
The MSCI Emerging Markets Index advanced 3.6% last week, the biggest weekly gain since June. An index tracking currencies in developing countries gained 0.9%.
Aramco has raised $25.6 billion in its share sale, which became a local affair after foreign fund managers shunned its premium valuation.
Saudi unemployment falls to 3-year low
Saudi Arabia’s citizen unemployment rate fell to the lowest in more than three years as the kingdom’s non-oil economy recovers.
Joblessness slipped to 12% in the third quarter from 12.3% in the previous three months, according to data published on Sunday by the official General Authority for Statistics. The quarterly data showed improvements across the board, with more Saudis working in both the public and private sectors and unemployment dropping for men and women.
Saudi Arabia’s unemployment is a key indicator watched by officials as they try to create jobs for nationals in a private sector dominated by foreign labour. Until now, improvements in employment have continued to lag a rebound in non-oil growth this year.
In addition to an improvement in private sector, the government is also hiring. The number of Saudis employed by public sector rose an annual 2.8%.
And although Saudi female unemployment remains over 30%, that’s largely a reflection of more women seeking jobs as social restrictions loosen in the kingdom. Annually, the number of working Saudi women has gone up nearly 1%, while female labour force participation has risen to more than 23%, its highest level on record.