Investors seek overseas exposure as local markets falter

  • Chinese investors are showing interest in Saudi Arabian equities amid weak domestic economy
  • Two exchange-traded funds focused on big Saudi companies gained up to 30% in their first three days of trade
  • Shanghai’s benchmark index is up only 0.1% this year while Shenzhen is down 13%
  • Chinese investors have also invested in U.S. and Japanese ETFs due to limited diversification options at home
  • Beijing’s business ties with Saudi Arabia are growing, making investments more attractive amid China-U.S. tensions

Chinese investors are increasingly investing in Saudi Arabian equities due to a weak domestic economy and limited diversification options. Two exchange-traded funds tracking major Saudi companies, Aramco and Saudi National Bank, gained up to 30% in their first three days of trade. In contrast, Shanghai’s benchmark index is up only 0.1% this year while Shenzhen has declined by 13%. This trend comes as Beijing strengthens its business ties with the Middle East, making Saudi investments more attractive amid tensions between China and the U.S. in trade, technology, and geopolitics.

Factuality Level: 8
Factuality Justification: The article provides accurate information about Chinese investors’ interest in Saudi Arabian equities due to weak domestic economy and lack of conviction for a sustained economic recovery in China. It also mentions the performance of various indexes and the appeal of overseas investing for diversification purposes. The article includes relevant details about ETFs, market trends, and China-Saudi business ties.
Noise Level: 7
Noise Justification: The article provides relevant information about Chinese investors shifting their focus towards Saudi Arabian equities due to weak domestic economy and tepid consumption in China. However, it lacks a comprehensive analysis of the long-term trends or possibilities, does not hold powerful people accountable for decisions, and could provide more actionable insights or solutions. It also briefly dives into unrelated territories such as geopolitics without exploring its consequences.
Public Companies: Aramco (N/A), Saudi National Bank (N/A), Baoshan Iron & Steel (N/A)
Private Companies: China Southern Asset Management,Huatai-Pinebridge Investment
Key People: Jun Rong Yeap (Market Strategist at IG), Jackie Choy (Director of Passive Investment Ratings at Morningstar)

Financial Relevance: Yes
Financial Markets Impacted: China’s equities markets, Saudi Arabian equities, US and Japanese ETFs
Financial Rating Justification: The article discusses the decline in interest in China’s equities markets due to concerns about the domestic economy and tepid consumption, and how Chinese investors are turning to overseas investments such as Saudi Arabian equities and other international ETFs. This has an impact on financial markets in China, Saudi Arabia, the US, and Japan.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.

Reported publicly: www.wsj.com