Emirates NBD Saudi equity fund targets $100 mln by year-end

Emirates NBD Saudi Arabia Equity Fund is expected to more than double in size to $100 million by year-end, following strong foreign investor interest in Saudi equities after FTSE Russell upgrade, Emirates NBD Asset Management said in a statement on Wednesday.

The fund has seen an inflow of $20 million in two months and offered returns of more than 18 percent year-to-date (YTD). It has grown to a size of over $30 million since its launch in December 2017.

The fund has been established to tap into renewed investor interest in the Saudi market, which was upgraded to FTSE Russell’s Emerging Market Index at the end of March – a development which is likely to see around $5 billion from global investors allocated to the Kingdom’s equities over the next 12 months.

Foreigners have been net buyers in the Saudi market every week this year, with total inflows exceeding $3 billion YTD.

Meanwhile, the asset management firm said Tadawul's possible inclusion in MSCI Emerging Market Index would lead to $40 billion of foreign inflows, giving a further boost to the market.  

“At a market capitalization of around $500 billion and foreign ownership below 2 percent, Saudi Arabia is the largest stock market in the world that is yet to be fully accessible to overseas investors," said Salman Bajwa, senior executive officer, Emirates NBD Asset Management.