Hong Kong’s CSOP Asset Management has no plans to change its strategic focus towards the Middle East in spite of investors pulling out from its Saudi Arabian exchange-traded fund, according to Wang Yi, the company’s chief investment officer.
CSOP, a unit of Shenzhen-based China Southern Asset Management, was the first asset management firm in Hong Kong to establish cross-border ETF business with the Middle East.
In 2023, the firm listed Asia’s first Saudi Arabia-focused ETF, the CSOP Saudi Arabia ETF, in Hong Kong.
The following year, it teamed up with Saudi Arabian investment firm Albilad Capital to launch the Albilad CSOP MSCI Hong Kong China Equity ETF on the Saudi bourse.
Since Israel and the US launched attacks on Iran on February 28 and up until April 30. investors have redeemed HK$340 million (US$43.58 million) from the CSOP Saudi Arabia ETF.
According to Wang, the outflows represented only 3.4% of the fund’s HK$10.08 billion of assets.
“Notably, Saudi Arabia has benefited from its unique East-West Petroline, which provides an alternative crude export route bypassing the Strait of Hormuz,” he says in an interview with Asia Asset Management.
“We do not intend to alter our strategic positioning in the Middle East in the near term,” he adds. “For Saudi Arabia especially, its alternative oil export capacity positions it to benefit from sustained higher oil prices, which are expected to bolster fiscal revenues.”
According to Wang, the financial connectivity between China and the Gulf Cooperation Council is a “structural, long-term trend that extends beyond any single geopolitical episode.
“We remain confident in the long-term fundamentals of the region and committed to offering investors transparent, cost-efficient access through out ETF platform,” he says
CSOP is the second largest ETF manager in Hong Kong with around HK$168 billion of ETF assets.
