China’s First Saudi ETFs Fly Off the Shelf as Investors Seek High Returns

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The first two Chinese mainland-listed ETFs tracking the Saudi Arabian stock market hit the limits on daily price gains both Tuesday and Wednesday. Photo: VCG

The first two Chinese mainland-listed exchange-traded funds (ETFs) tracking the Saudi Arabian stock market have been in hot demand since their debut Tuesday, as investors hunt for high returns amid China’s lackluster stock market.

The ETFs hit the limits on daily price gains both Tuesday and Wednesday. Trading was suspended Thursday until 10:30 a.m. due to relatively high premiums, China Southern Asset Management Co. Ltd. and Huatai-PineBridge Fund Management Co. Ltd., the managers of the two funds announced separately in the morning.

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The first two mainland-listed ETFs tracking the Saudi Arabian stock market saw high demand, surpassing daily price gain limits on their first two days.
Both ETFs had high premium ratios, with one raising 634 million yuan and the other 590 million yuan before listing.
The ETFs, linked to the Hong Kong-listed CSOP Saudi Arabia ETF, capitalize on Gulf state's growing ties with Asian economies and a lackluster Chinese stock market.

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Who’s Who

China Southern Asset Management Co. Ltd.: China Southern Asset Management Co. Ltd. manages one of the first Chinese mainland-listed ETFs tracking the Saudi Arabian stock market. The ETF raised 634 million yuan ($87 million) before its listing. The fund invests in the CSOP Saudi Arabia ETF through the Qualified Domestic Institutional Investor (QDII) program, allowing mainland institutional investors to trade offshore securities.

Huatai-PineBridge Fund Management Co. Ltd.: Huatai-PineBridge Fund Management Co. Ltd. is a joint venture owned by U.S. asset manager PineBridge and two Chinese companies. It manages an ETF that raised 590 million yuan ($87 million) before listing. The ETF tracks the Saudi Arabian stock market by investing in the Hong Kong-listed CSOP Saudi Arabia ETF through the QDII program, allowing mainland investors to trade offshore securities.

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What Happened When

2024-07-16：: The first two Chinese mainland-listed exchange-traded funds (ETFs) tracking the Saudi Arabian stock market debuted and hit the limits on daily price gains.