Saudi ETFs make winning China debut as financial ties with Middle East
The two feeder funds, managed by China Southern Asset Management and Huatai-PineBridge Investment, rose 7.1 per cent and 5.6 per cent in Shenzhen and Shanghai, respectively, after raising a combined 1.2 billion yuan (US$170 million), outperforming the CSI 300 Index, which added 0.2 per cent.
“The ETFs offer Chinese investors convenient access to markets that were previously difficult to reach,” said Shuiyang Pan, portfolio manager of the Saudi ETF at China Southern Asset Management. “They can now directly invest in the Middle Eastern stock market through the Saudi Arabia ETF, without facing obstacles like opening overseas accounts, complying with complex regulations and handling currency exchanges.”
“Through Hong Kong, today’s ETF listings connect the Middle East’s fast-growing capital markets to Asia’s deep liquidity pools, setting a strong precedent for diversification among China’s onshore investors.”
The ETFs also help Chinese investors increase the diversity of their asset allocation globally to reduce overall risk, Pan said in a statement.
“More related ETF products may come to the market in the future to meet with Chinese investors’ growing interest in the Middle Eastern market,” he added.
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