Two Saudi ETFs debut on Shanghai, Shenzhen Exchanges

Two exchange-traded funds (ETFs) that track Saudi stocks were launched today, July 16, on the Shanghai and Shenzhen Stock Exchanges in China, paving the way for mainland Chinese investors to diversify their holdings at the international level.

According to Bloomberg, China Southern Asset Management CSOP Saudi Arabia ETF was listed in Shenzhen after raising $87 million, while the Huatai Pine Bridge CSOP Saudi Arabia ETF began trading in Shanghai after raising $82 million.

Both ETFs will invest indirectly in the Saudi market through Hong Kong-based CSOP Saudi ETF, which was first launched last year.

The Saudi-China ETF program aims to facilitate the joint listing of funds in both countries and to launch of feeder funds, which invest in other funds.

Mao Wei, Chief Equity Investment Officer at China Southern Asset Management, said target investors are those with knowledge in stock markets, have a request to distribute their investments across global assets, and confidence in the energy sector. Investors are paying greater attention to Saudi Arabia, especially those interested in the energy and financial sectors, compared to investment options in the US and Japan.

Melody Xian He, Deputy CEO of CSOP Asset Management, noted that investors in mainland China will find it easier to build buying and selling positions on Saudi stocks through the two new funds, where they can invest in the yuan and find information in the Chinese language, indicating that 20,000 individuals and funds received allocations in ETFs during a seven-day offer period.

Ding Chen, CEO of CSOP Asset Management, which manages the assets of the Saudi ETF in Hong Kong, previously told Argaam that the company is trying to list the fund on the Shanghai and Shenzhen stock exchanges, which allows Chinese investors to invest in the Saudi market, in addition to obtaining liquidity pumped into the Hong Kong Stock Exchange.