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Bank Albilad’s CSOP MSCI Hong Kong China ETF is set to start trading on Tadawul this Wednesday, according to Bloomberg and the South China Morning Post. The ETF is going to Saudi Arabia’s largest ETF to track Hong Kong-listed Chinese stocks. The fund will be launched in partnership with Hong Kong-based CSOP Asset Management.The lender last week raised USD 1.3 bn for the fund through its securities arm, USD 800 mn higher than what pundits had expected.
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REMEMBER: CSOP’s Saudi Arabia exchange-traded fund (2830.HK on Reuters) — the first ETF in Asia tracking Saudi equities — debuted in Hong Kong last year, and is now trading 5.2% higher than on its first trading day at HKD 81.6.
Facilitating access to Chinese stocks: The ETF aims to provide Saudi investors easier access to Chinese equities in local currency, allowing investments starting at SAR 10 in a fund that includes the 30 largest Sharia-compliant companies listed in Hong Kong.
What CSOP said: “This strategy worked well as the Saudi ETF listing in Hong Kong, Shanghai and Shenzhen have been very successful, which helps establish trust among the regulators,” said Ding Chen, CEO of CSOP Asset Management.
Breaking it down: The ETF will invest in Chinese equities through the Hong Kong-domiciled CSOP MSCI HK China Connect Select ETF, which counts e-commerce firm Meituan and sportswear maker Anta Sports Products among its biggest holdings, but excludes companies like HSBC and Alibaba to maintain Sharia compliance. The feeder fund has fully built positions via the master fund.
Another HK-focused ETF coming soon? Another ETF tracking Hong Kong stocks is set for launch before year-end by Saudi Awwal Bank’s SAB Invest which lined up Capital Market Authority (CMA) approval to offer its Hang Seng Hong Kong ETF on Tadawul.
