KUALA LUMPUR, Nov 19 (Bernama) -- Bursa Malaysia gave up earlier gains to end mixed today, amid a higher regional market showing, as property, construction, and healthcare counters attracted buying interests, while plantation, banking, and telecommunication stocks saw some profit-taking, an analyst said. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 1.70 points to close at 1,602.34 from yesterday’s close of 1,604.04. The benchmark index, which opened 0.86 of-a-point lower at 1,603.18, moved between 1,601.02 and 1,608.88 during the trading session. However, the broader market was mixed to higher, with gainers leading decliners by 565 to 438 while 502 counters remained unchanged, 961 untraded, and 14 suspended. Turnover narrowed to 2.83 billion units valued at RM2.08 billion versus 2.96 billion units valued at RM2.23 billion yesterday. Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the benchmark index remained range-bound and it required a dec
Chinese investors now have a new avenue to invest in Saudi Arabian stocks with the debut of two exchange-traded funds (ETFs) focused on equities in the oil-rich nation. These funds, launched today in Shanghai and Shenzhen, come as China and Saudi Arabia continue to deepen their economic ties.
Key Highlights:
ETF Listings:
- Shenzhen Listing: The China Southern Asset Management CSOP Saudi Arabia ETF QDII launched in Shenzhen, raising 634 million yuan (US$87 million or RM408.19 million).
- Shanghai Listing: The Huatai-PineBridge CSOP Saudi Arabia ETF QDII began trading in Shanghai after raising 590 million yuan.
- Performance: Both funds traded close to their listing prices as of 10:20 a.m. local time.
Investment Opportunities:
- Diversification: These ETFs provide mainland investors with an opportunity to diversify their holdings internationally, particularly in sectors such as energy and oil.
- Strategic Timing: The launches come at a time when Beijing is strengthening its ties with Gulf nations amidst tensions with the West, and Saudi investors are increasing their presence in Asia.
Target Investors:
- Profile: The target investors are those knowledgeable in equity markets, seeking global asset allocation, and confident in the energy sector, according to Mao Wei, Chief Equity Investment Officer at China Southern Asset Management Co.
- Sector Focus: Investors are expected to pay more attention to Saudi Arabia’s energy and financial sectors compared to US or Japan investment options.
Investment Mechanism:
- Indirect Investment: The ETFs will invest indirectly in the Saudi market through the Hong Kong-domiciled CSOP Saudi Arabia ETF, which launched last year with over US$1 billion raised. This fund tracks the FTSE Saudi Arabia Index and includes Saudi Arabia’s sovereign wealth fund as a leading investor.
Market Impact:
- Accessibility: The new ETFs make it easier for mainland investors to gain exposure to Saudi stocks using yuan and accessing information in Chinese, according to Melody Xian He, Deputy CEO at CSOP Asset Management.
- Participation: Approximately 20,000 individuals and funds took allocations in the ETFs during a seven-day offer period.
Future Prospects:
- Hong Kong as a Beneficiary: As investment links between China and Saudi Arabia deepen, Hong Kong could become a significant beneficiary of the Saudi China ETF connect program, according to Rebecca Sin, an analyst at Bloomberg Intelligence in Hong Kong.
- Next Steps: The program could facilitate the cross-listing of funds and the launch of feeder funds by Saudi asset managers.
The launch of these ETFs marks a significant step in broadening investment opportunities for Chinese investors and strengthening economic ties between China and Saudi Arabia. With the ability to trade Saudi stocks in yuan and access detailed information in Chinese, these funds are poised to attract substantial interest from those looking to diversify their portfolios and capitalize on the growth potential in the energy sector.
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