DUBAI, June 21 (Reuters) - Saudi Arabia's stock market may get a moderate boost on Wednesday from news that Deputy Crown Prince Mohammed bin Salman was promoted to crown prince, fund managers said, though weak oil prices look likely to dampen most of the Gulf.
Prince Mohammed is architect of radical reforms to diversify the Saudi economy beyond oil, and his promotion gives further assurance that key parts – including a plan to sell a stake in national oil giant Saudi Aramco, and austerity measures to close a budget deficit caused by shrunken oil revenues - will continue.
"This isn't unexpected though it came earlier than expected," said a Jeddah-based fund manager. "There won't be a risk of the reforms being scrapped."
Also, MSCI announced overnight that it will start considering whether to upgrade Saudi Arabia to emerging market status; the upgrade would occur in two phases, in May 2019 and August 2019.
MSCI's announcement has largely been priced in, but could still prove modestly positive for the market in the short term.
However, the overall environment for Gulf markets is poor; Brent oil sank to around $46 a barrel overnight, its lowest level since November, before global oil producers agreed on output cuts. Also, MSCI's broadest index of Asia-Pacific shares outside Japan is down 0.7 percent. (Reporting by Celine Aswad and Andrew Torchia)