Middle Eastern investors have rushed to buy the first exchange-traded fund (ETF) tracking Hong Kong stocks to capture the recent market rally and long-term growth “miracle” of China, according to the CEO of the issuer.
Albilad CSOP MSCI Hong Kong China Equity ETF (Albilad ETF), the first index fund tracking Hong Kong stocks in Saudi Arabia, had already raised HK$10 billion (US$1.3 billion) as of October 23, according to Hong Kong-based CSOP Asset Management which joined hands with Albilad Capital to issue the fund.
Saudi investors can use as little as 10 Saudi riyal (US$2.66) to buy the ETF that tracks the 30 largest Hong Kong listed companies that comply with Islamic requirements. An ETF is an investment vehicle that works like a combination of mutual funds and stocks, allowing investors to buy and sell units of the fund which holds a basket of stocks.
Since the public offering of the ETF is still ongoing, the size of the fund may grow when it is listed on the Saudi Stock Exchange (Tadawul) on Wednesday. It will be the largest ETF in the Middle East, according to Bloomberg data.
“We have seen a very strong response from the Middle East investors during the roadshow, as they expressed strong buying interest in this Hong Kong stock ETF,” said Ding Chen, CEO of CSOP Asset Management, in an exclusive interview with the Post.
“Middle East investors believe in China’s economic growth story, which they consider to be a ‘miracle’ and they want to invest in the world’s second largest economy.