Chinese investors are enthusiastically investing in Saudi-focused ETFs, fueled by growing economic ties between the two countries.

From Business Standard: 2024-07-28 22:22:01

Chinese investors are flocking to Saudi-focused ETFs in Shanghai and Shenzhen, with both funds soaring by 10% daily limit in their first two days. Economic ties between China and Saudi Arabia have fueled the fervor, with billion-dollar deals announced in various sectors. Chinese investors seek higher returns amid thin yields in local assets.

The Huatai-PineBridge CSOP and China Southern Asset Management ETFs traded at premiums of 17% and 6% over their NAV, respectively. This contrasts with the typical 1% premium seen in most ETFs. Chinese investors have previously shown enthusiasm for US and Japanese equities. The Saudi market presents a more exotic opportunity with great potential for Chinese investors.

The ETFs track the FTSE Saudi Arabia Index, heavily weighted towards financials, basic materials, and energy companies. Some of the top holdings include Al Rajhi Bank, Saudi Aramco, and Saudi National Bank, comprising nearly one-third of the index. The high dividend yields from financial and resource stocks provide a competitive advantage for the Chinese market.



Read more at Business Standard: Chinese investors pile into Saudi ETFs as two countries grow closer | World News