news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Two Saudi ETFs were “bought out” on the first day of listing, and both hit their daily limit.

On July 16, Huatai-PineBridge Fund's CSOP Saudi Arabia ETF ("N Saudi ETF") and China Southern Fund's CSOP Saudi Arabia ETF ("Saudi ETF") were listed on the Shanghai and Shenzhen Stock Exchanges respectively. Both products track the FTSE Saudi Arabia Index.

From the perspective of trading, N Saudi ETF and Saudi ETF opened nearly 2% higher, and then rose sharply after 10 o'clock, and both hit the daily limit in the afternoon. As of the close of Tuesday afternoon, the daily trading volume of N Saudi ETF was 2.058 billion yuan, the premium rate was 6.31%, and the turnover rate was as high as 333.72%; the daily trading volume of Saudi ETF was 2.838 billion yuan, the premium rate was 6.18%, and the turnover rate was as high as 427.67%.

In response, Huatai-PineBridge Fund Management issued an announcement during the afternoon trading hours: Today, the secondary market trading price of the company's Huatai-PineBridge Southern East England Saudi Arabia Exchange Traded Open Index Securities Investment Fund (QDII) was significantly higher than the reference net value of fund shares, showing a large premium. Investors are hereby reminded to pay attention to the premium risk of secondary market trading prices. If investors invest blindly, they may suffer heavy losses.

Industry insiders pointed out that cross-border ETFs support T+0 intraday trading, which means that securities purchased on the same day can be sold on the same day, and can be traded repeatedly during trading hours without any limit on the number of times. In addition, ETF taxes and commissions are very low, which is more in line with the needs of high-frequency trading. However, in the absence of an arbitrage mechanism, product risks will be magnified to a certain extent.

"Except for US stock ETFs and Hong Kong stock ETFs, the scale of cross-border ETFs is generally small, and liquidity is a major flaw." An insider of a public offering reminded that in addition, unlike A-share ETFs with smooth arbitrage mechanisms, cross-border ETFs are subject to QDII quota restrictions, and the subscription limit is often low. When market enthusiasm is high, it is difficult to have sufficient arbitrage funds to smooth out the premium.

"In addition to the risk of high premium callback, exchange rate fluctuations are also one of the risks of investing in cross-border ETFs." The above-mentioned person further pointed out that the subsequent trend of cross-border ETFs depends on the combined influence of multiple factors, such as the global economic situation, policy environment, capital flow, market sentiment, etc. Investors should pay close attention to changes in these factors, and also pay attention to factors such as exchange rate fluctuations and trading time differences in overseas markets.

Public data shows that the huge economic benefits brought by oil and mineral revenues have made Saudi Arabia the largest economy in the Middle East and the only Arab country in the G20. Since 2022, Saudi Arabia's per capita GDP has exceeded US$30,000 for two consecutive years, and in 2023 it set a new record of US$33,000, which is not only far higher than the world average of US$13,000, but also ranks first among the countries in the Middle East. In the ranking of the richest countries in 2024, Saudi Arabia has jumped to 15th in the world.

However, the "oil content" in Saudi ETFs is not high. It is understood that the FTSE Saudi Arabia Index tracked by the two Saudi ETFs covers a number of pillar industries of Saudi Arabia's national economy, such as finance, materials, energy, utilities and telecommunications services. Most of the index's weighted stocks are giants with influence in Saudi Arabia and even the world. Its market representativeness can be said to be the Saudi version of the "Shanghai-Shenzhen 300"; and because financial and resource companies account for a high proportion of the constituent stocks, it has a high dividend attribute. The average dividend rate of the top ten weighted stocks in the index is 3.59%, which has certain dividend attributes.

Relevant statistics show that as of June 28 this year, the top ten weighted stocks of the index are Rajhi Bank, Saudi Aramco, Saudi National Bank, ACWA Power, Saudi Telecom, Saudi Basic Industries, Saudi Arabian Mining, Riyadh Bank, Alinma Bank, and Saudi British Bank, with a total weight of 62.84%.