Global indices funds recorded the best inflows to the Saudi market in 21 months, thanks to the change in the map of geographical investments, due to the Ukrainian crisis, and the increasing bets of major asset management companies regarding the positive repercussions of high oil prices on the components of the local economy and listed companies.
The disclosures of the first quarter of the funds known as the ETF showed that the value of the assets of “foreign index funds” invested in the Saudi market increased at the highest pace since June 2020, as the total value of the inflowing liquidity jumped 25.3%, at the end of the first quarter compared to what it was at the end of 2021, according to the audited data from the platform Morning Star Direct.
Al-Eqtisadiah newspaper stated that the value of the assets of foreign index funds invested in the Saudi stock market rose to 12.33 billion dollars at the end of the first quarter, compared to 9.84 billion riyals at the end of the fourth quarter of 2021.
The value of the increase in the value of Saudi stock assets, which was in the possession of foreign funds in the first quarter, amounted to $2.49 billion, compared to the data of the fourth quarter of 2021.
Foreign index fund managers continued to reduce their holdings of emerging market companies and Russia, and redirected part of that liquidity to the Saudi stock market.
Fund managers have allocated 2.84% of the value of the funds’ assets, which are directed to emerging market stocks, amounting to $433.60 billion, to invest in the Saudi stock market during the three months of this year.
The data of the “Morning Star” platform revealed the presence of cash flows from 164 funds in the category of index funds, after the Saudi stock market attracted at least five new funds during the first quarter. The funds included in the monitoring were managed by 32 asset management companies and international banks at the end of the first quarter.
Knowing that the five funds, out of the 164 funds, invest between 100% and 64% of the fund’s assets in Saudi stocks.
While most funds preferred to invest in Saudi stocks through emerging market funds, which are distinguished by investing in each stock market that was promoted through the indices of “FTSE Russell”, “Standard & Poor’s Dow Jones” and “MSCI”.
Most of the individuals’ investments in the Saudi stock market come from the European Union, the United States of America and Canada.
Among the currencies in which these funds are denominated, the US dollar was the most preferred currency among the total funds invested in the Saudi market due to the peg of the local currency to the dollar.