International Finance

Blackrock and HSBC reaffirm interest in Saudi Arabia with dedicated funds

HSBC Blackrock Saudi Arabia funds
Global asset managers introduce ETFs tracking MSCI Saudi index in response to inclusion of Saudi equities in global indices

Blackrock and HSBC reaffirmed their interest in Saudi Arabia by launching dedicated investment funds for the Kingdom. Both the global asset managers have launched exchange-traded funds that will track the MSCI Saudi Arabia 20/35 Capped Index that focus on mid and large cap companies in Saudi Arabia.

HSBC’s unit in Saudi Arabia told the Financial Times that the launch was in response to demand by international investors after Saudi Arabian stocks were added to global indices. The introduction of the funds came after Blackrock CEO Larry Fink and HSBC CEO John Flint attended  a financial conference in Riyadh last month.

Blackrock’s new investment product is a Ucits version of an exchange traded fund  targeted at US investors. The US asset manager said the fund was developed in response to demand from customers in anticipation of the inclusion of Saudi Arabian equities to the MSCI. Blackrock also plans to open an office in Saudi Arabia, affirming its commitment to the Kingdom’s markets.

The HSBC MSCI Saudi Arabia 20/35 Capped Ucits ETF started trading last Wednesday on the London Stock Exchange. Blackrock’s iShares MSCI Saudi Arabia Capped Ucits ETF was launched on April 10. The fund attracted $5.2 million in assets in the first three weeks of trading.

Jadwa Investment had predicted that the inclusion of Saudi Arabian equities in both the FTSE Emerging Markets index and the MSCI Emerging Markets index would bring passive investments of at least $15 billion in 2019. In the research note Jadwa also said that Saudi Arabia’s TASI index could ‘plausibly ‘ hit 10,000 in 2019.





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