Dubai: BlackRock, the world’s biggest money manager, said it plans to open an exchange traded fund (ETF) for Saudi Arabian shares ahead of the opening up of the capital markets to foreign investors.
The ETF comes as the ishares MSCI Saudi Arabia Capped ETF seeks to track the investment results of a broad-based index composed of Saudi Arabian equities.
“The Underlying Index is designed to measure the potential equity market in Saudi Arabia, should the market open up to foreign investors, and may include large or mid or small capitalisation companies and [its] components primarily include financials, materials and telecommunications companies,” BlackRock said in a SEC filing.
“The fund plans to hold 25 per cent or more of its total assets in a particular industry or group of industries to approximately the same extent that the Underlying Index is concentrated,” BlackRock added.
Saudi Arabia, the world’s biggest exporter of crude oil, plans to open its capital markets to foreign investors in 2015. The Tadawul All Share Index has gained 13 per cent compared to MSCI’s 0.8 per cent losses in the emerging market index.
“BlackRock is very keen on the region, they feel that there is a lot of potential for institutional and individual investors,” said Saleem Khokhar, head of equities at NBAD’s asset management group. “They want to move ahead of the game and that’s why there are positioning themselves appropriately.”
He added that “they may be planning more ETFs in the region.”
