On July 16, two new Exchange-Traded Funds (ETFs) linked to the stock price index of the Saudi Stock Exchange (Tadawul) were listed on the Shanghai and Shenzhen stock exchanges in China. This marks the first time Saudi stock ETFs have been listed in mainland China. The move is expected to strengthen financial cooperation between the two countries, aligning with China’s Belt and Road Initiative. For Saudi Arabia, this presents an opportunity to attract Chinese investment.
The two ETFs listed are the “Huatai-PineBridge CSOP Saudi Arabia ETF” and the “China Southern Asset Management CSOP Saudi Arabia ETF.” The total amount raised so far was approximately 1.2 billion yuan (US$ 166 million).
China implements capital controls that generally restrict cross-border securities investments. These two ETFs utilize the Qualified Domestic Institutional Investor (QDII) framework, which allows Chinese domestic investors to invest overseas within certain limits.
Source: Nikkei Chinese, July 16, 2024
https://zh.cn.nikkei.com/china/cfinancial/56153-2024-07-16-15-39-48.html