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HSBC launches new Saudi indices, funds and access products

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HSBC Corporate, Investment Banking and Markets Global Research has launched the HSBC Saudi Equity Index a benchmark for the returns generated by the Saudi equity market and is launching a

HSBC Corporate, Investment Banking and Markets Global Research has launched the HSBC Saudi Equity Index a benchmark for the returns generated by the Saudi equity market and is launching a tailored sector index, the HSBC Saudi Petrochemical Equity Index. Both indices are reviewed quarterly.

The Saudi Index is comprised of 36 liquid stocks representative of the market capitalisation of the broad range of economic sectors in Saudi. The companies included reflect the breadth and diversity found in the Saudi stock market, from banks to bookstores, from petrochemicals to publishing.

Created to provide clients with a potentially high growth sector benchmark, the Petrochemical Index provides exposure via a portfolio of 11 shares with weightings representative of their market capitalisation in this sector. The Saudi economy is largely driven by oil prices and by the Petrochemical industry and this sector index includes some of the most important oil industry companies in the world such as SABIC and SAFCO.

Complementing these indices, HSBC Saudi Arabia has launched two new open ended funds: the HSBC Saudi Equity Index Fund and the HSBC Saudi Petrochemical Equity Opportunities Fund. Both passively managed funds are aimed at institutional investors and third party distributors and represent one practical way for offshore investors to gain exposure to the Saudi equity market, which is currently closed to direct investment by non-domiciled investors.

Osama M Shaker, Head of Asset Management in Saudi, says,’This is an extremely exciting development for us and adds significantly to our existing offering of Saudi funds which have seen strong growth and increasing interest in the last three months.’

HSBC Saudi Arabia Limited’s existing Saudi Equity Funds, having together over USD2.5bn AUM, are: Amanah Saudi Equity Fund, Amanah Saudi Industrial Companies Fund, Financial Institutions Fund, Saudi Equity Fund, Saudi Equity Trading Fund. HSBC is already able to offer access via participatory notes and swaps over these existing funds.

Additionally, HSBC CIBM is offering market access through participatory notes and swaps over these funds as another way to gain exposure to the Saudi market, particularly for those institutional investors who want to achieve exposure without the inconvenience and time delay which can be experienced in setting up locally or who are looking for gearing, leverage and funding.

HSBC Bank plc is also offering participatory notes and swaps to enable investors to gain individual equity exposure in the following ME markets: Abu Dhabi, Bahrain, Dubai DFM, Dubai DIFX, Egypt, Israel, Jordan, Kuwait, Lebanon, Oman and Qatar.

Hugh Evans, Global Head of Access Products, says ‘The Saudi market is currently in a period of rapid expansion and has been a real success story recently. These funds and access products are suited to a wide range of investors who want to gain exposure to a market that is otherwise closed for direct investment by non-GCC residents.’

‘Saudi represents a large proportion of the market capitalisation in the Middle East and, in offering this range of investment routes, HSBC will enable investors to properly allocate their exposure across the Middle East region for the first time.’

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