Saudi Arabia and China Strengthen Financial Ties with Launch of Exchange-Traded Funds

Saudi Arabia and China are entering a new era of connectivity with the recent launch of exchange-traded funds (ETFs) on Chinese stock exchanges, according to Yasir Al-Rumayyan, Governor of the Public Investment Fund (PIF)

At the listing event in Shenzhen, Al-Rumayyan emphasized that the new ETFs provide Asian investors with access to the Saudi capital market and its sustainable long-term growth, driven by strategic economic transformation. Last week, two ETFs focused on Saudi Arabian stocks made their debut on the Shanghai and Shenzhen stock exchanges. These feeder funds, operating under the Qualified Domestic Institutional Investor program, began trading on July 16, with both briefly hitting the 10 percent daily limit on their launch day.

The first fund, CSOP Saudi Arabia ETF QDII, managed by China Southern Asset Management, was listed on the Shenzhen Stock Exchange after raising 634 million Chinese yuan (87 million dollars). The second fund, CSOP Saudi Arabia ETF QDII, managed by Huatai-PineBridge, started trading on the Shanghai Stock Exchange after raising 590 million Chinese yuan.

These ETFs are among the first batch of funds in China allowed to invest in the Saudi capital market. PIF aims to attract foreign investors and increase capital inflows into Saudi Arabia, building on the success of the CSOP Saudi Arabia ETF launched on the Hong Kong Stock Exchange in November 2023. This fund, launched with an initial investment of over 1 billion dollars, including a 500 million dollar contribution from PIF, became the world’s largest Saudi Arabian ETF.

According to Abdulmajeed Al-Hagbani, Head of Securities Investments for the Middle East and North Africa Investments Division at PIF, the new ETFs are designed to meet the needs of international investors by allowing them to diversify their portfolios within the Saudi market. He added that the Saudi capital market is focused on attracting new investors, noting that a diversified investor base is crucial for market growth.

The statement highlighted that these developments offer Chinese investors new opportunities to invest in the largest market in the Middle East and create a bridge for greater access to one of the world’s fastest-growing and most strategic markets. Over time, these initiatives will also benefit individual investors in Saudi Arabia.