Saudi Arabia's stock exchange, the Tadawul, has officially completed its full inclusion on the MSCI emerging markets index.
The second and final phase of its inclusion marks a continuation of efforts by the oil-rich kingdom to open up its financial market to international investors.
"Summer is over today, we have started with the MSCI inclusion and … we believe liquidity should be enhanced by opening this new channel of foreign investors," Tadawul CEO Khalid Abdullah al-Hussan told CNBC's Hadley Gamble in an exclusive interview.
Saudi Arabia's stock market — the largest in the region, worth approximately $549 billion — will have a weight of 2.8% on the MSCI index.
The inclusion will also help when it comes to initial public offerings (IPO), al-Hussan said, before adding that the participation of foreign investors in the Saudi market would result in "flawless" public listings.
His comments come as investors eagerly await the listing of state-owned oil giant Saudi Aramco — which is likely to become the largest publicly-traded company in the world.
The Tadawul closed more than 1% lower on Wednesday, but remains up roughly 4.4% since the start of the year.
In a report published earlier this week, analysts at the Institute of International Finance (IIF) said early positioning by investors had been "relatively slow" since the MSCI inclusion announcement last year.
That's because market participants were worried about policy uncertainty, high valuations for Saudi-listed firms and reputational damage related to the murder of journalist Jamal Khashoggi.
"Nonetheless, it seems that investors have shrugged off such concerns this year," analysts at the IIF said.
The IIF's report found that in the first eight months of 2019, foreign equity inflows to Saudi Arabia surpassed those of India and China — "which was remarkable given that Saudi Arabia's economy is just a fraction of the size of India and China."
Strong inflows to Saudi Arabia this year are in sharp contrast to other emerging markets, the IIF report said, citing renewed U.S.-China trade tensions for weaker equity flows in other emerging markets.
Saudi Arabia's main stock market index joined the FTSE earlier this year and hopes to be included in the S&P by the end of this year.
Index provider MSCI incorporated shares of companies based in the United Arab Emirates and Qatar into its emerging market index in 2014.
—Clarification: This story has been updated with the latest figure from Tadawul on its total value.