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BlackRock and HSBC launch Saudi investment funds

BlackRock and HSBC, both prominent asset managers, have launched dedicated Saudi Arabia investment funds in the past month, the Financial Times claims.

The paper reports that Larry Fink and John Flint, chief executives of BlackRock and HSBC respectively, attended a financial conference held in the Saudi capital of Riyadh on April 24.

Other senior figures at the event included Frédéric Oudéa, CEO of Société Générale, and David Schwimmer, CEO of the London Stock Exchange (LSE). The event was held shortly after news that Saudi Arabia has executed 37 people accused of terrorist offences, turning attention once more to the kingdom’s record on human rights.

BlackRock and HSBC Global Asset Management have each launched exchange traded funds (ETFs) recently that will track the MSCI Saudi Arabia 20/35 capped index, which focuses on the Gulf state’s mid and large-cap companies.

Client demand

The HSBC unit, which manages $451 billion, said the launch was “in response to interest from international investors following the inclusion of Saudi Arabian equities into global indices”.

MSCI is to include Saudi Arabia in its influential emerging markets index this summer and the Gulf state’s stock market was also recently admitted into emerging market indices run by FTSE Russell and S&P Dow Jones.

BlackRock, whose new product is au undertakings for collective investment in transferable securities (Ucits) version of an ETF available for US investors, said its launch was in response to “significant client demand . . . in anticipation of the MSCI index inclusion”.

The HSBC MSCI Saudi Arabia 20/35 Capped Ucits ETF began trading on the LSE last week, while BlackRock's iShares MSCI Saudi Arabia Capped Ucits ETF was launched on April 10 and attracted $5.2 million in assets in the first three weeks of trading.

The FT report also stated that BlackRock is understood to be considering adding a Riyadh office to its network.

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