Saudi Arabia’s aim to boost foreign investment in the $496 billion Tadawul stock exchange has taken a leap forward with the launch of a new index of the Kingdom’s biggest publicly traded companies.

Top index provider MSCI has teamed up with the Saudi Stock Exchange, known locally as the Tadawul, to launch the tradeable MSCI Tadawul 30 Index.

“Today’s launch of the MSCI Tadawul 30 Index (MT30) is a significant step forward in facilitating the creation of a derivatives market for Saudi Arabia and advancement of the Vision 2030 Financial Sector Development Program,” said Khalid Al-Hussan, CEO of Tadawul.

He also revealed there were “additional derivatives launches in the pipeline,” that were expected to create “new opportunities for investors to diversify risk and broaden exposure to the Saudi market.”

The index will provide investors with a useful benchmark of the largest liquid companies in Saudi Arabia and serve as the basis for development of a Saudi-listed index futures contract, MSCI and Tadawul said in a joint statement on Wednesday.

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Saudi Arabia has the largest market capitalization in the region and is ranked the 24th largest stock market among 68 members of the World Federation of Exchanges.

Middle Eastern funds are expected to target Saudi and Kuwaiti stocks this year but are more cautious about other regional markets, according to a Reuters poll.

However some countries, including in the Middle East, remain exposed to high levels of dollar denominated borrowing which could affect sentiment negatively.

“The countries that have borrowed in dollars are the countries that are most exposed,” James McCormack, the Hong Kong-based global head of sovereign and supranational group at Fitch, told Bloomberg in an interview this week.

Saudi Arabia’s new index will initially compromise the 30 companies with the largest market capitalization on the Tadawul. It will be rebalanced four times a year, and the number of securities may vary within a range of 25-35 securities to reflect changes in the underlying market, the pair said.

Individual companies are capped at a maximum 15 percent weighting in the index.

The launch coincides with Saudi Arabia joining the key MSCI Emerging Markets Index

Plans for the tradeable index were first revealed last September — three months after MSCI announced the planned classification of Saudi Arabia as an emerging market.

The Kingdom will enter the MSCI Emerging Markets Index in two phases this year, with the first phase planned to coincide with MSCI’s semi-annual index review in June.

“We have seen increasing demand by institutional investors for tradeable indexes that can serve as the basis for liquid instruments to access equity markets globally,” said Robert Ansari, the regional head of MSCI.