Saudi stocks attract billions of dollars in inflows | Financial Times:
Investors have flooded into Saudi stocks this year after the kingdom’s share market was included in widely followed benchmarks that guide trillions of dollars in assets.
Mutual and exchange traded funds that invest in companies on Riyadh’s Tadawul stock exchange have rocketed to $4.8bn in assets from just $356m at the start of the year, according to EPFR Global data. The growth comes after indexing groups MSCI, FTSE Russell and S&P Dow Jones Indices included the stocks in popular emerging markets benchmarks and as the government has eased rules governing foreign ownership of shares.
The surge in assets reflects the heft that index providers wield in guiding investor assets across global financial markets. Inclusion in a benchmark induces active fund managers to buy the stocks to keep pace with the indices they are ranked against, while passive funds automatically hoover up the shares by design.
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