Rising Chinese Investments in ETFs Focus on Saudi Stocks
Chinese investors are pouring money into two new exchange-traded funds (ETFs) that track Saudi stocks, following the weak performance of local Chinese stocks. This has contributed to an increased demand for foreign assets.
Exchange-traded funds (ETFs) focusing on Saudi Arabia had a strong start when they first appeared in Shanghai and Shenzhen on July 16. Moreover, each of them jumped by the maximum daily limit of 10% in the first two days of trading.
However, their trading was suspended for part of July 18 after their managers informed the exchanges that the premium on the fund units over their net asset value had become excessive.
Saudi Stocks
The South China Asset Management Company had listed the Saudi Arabian stock exchange-traded fund “QDII” in Shenzhen after raising 634 million yuan (87 million USD). The second fund, “Huatai-PineBridge Saudi Arabia ETF,” began trading in Shanghai after raising 590 million yuan.
Mao Wei, Chief Investment Officer at China Southern Asset Management, stressed that the target investors for the exchange-traded funds are those knowledgeable about stock markets, seeking global asset allocation, and confident in the energy sector.
He added that investors will focus on the energy and financial sectors in Saudi Arabia rather than options in the United States and Japan.
Exchange-traded funds will facilitate investors from the mainland in diversifying their holdings internationally, especially in the region that has influence in the energy and oil sectors.
Exchange-traded funds will indirectly invest in the Saudi market through the CSOP Saudi Fund traded in Hong Kong, which debuted in the Asian market last year after raising over one billion dollars. The fund, which tracks the FTSE Saudi Index, had Saudi Arabia’s sovereign wealth fund as one of its major investors.”
The Saudi-Chinese Exchange-Traded Fund (ETF) program aims to facilitate the joint listing of funds in both countries or the launch of feeder funds.
These funds aim to strengthen investment ties between China and Saudi Arabia. In May, the main stock exchanges in Hong Kong and Riyadh organized a conference, where officials emphasized the shared goal of offering more products to Chinese and Middle Eastern investors.
Related Topics :
Foreign Investment in Saudi stocks Rises 364.1919 billion Riyals
UN Adopts Chinese-backed Resolution to Close AI Access Gap
Alshahrani: Fueling Local Investments Stimulates Saudi Economy
