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In 6 days, it attracted 30 billion yuan, and Saudi ETF played a roller coaster.

Release Time:2024-07-24

After the Nikkei ETF and Nasdaq ETF were snapped up, Saudi ETF ushered in its dazzling moment.


On July 16th, the first batch of Saudi ETFs in China was officially listed and traded. Southern fund South East Britain Saudi Arabia ETF (hereinafter referred to as "South Saudi Arabia ETF") and Huatai Bairui South East Britain Saudi Arabia ETF (hereinafter referred to as "Huatai Bairui Saudi Arabia ETF") landed on Shenzhen Stock Exchange and Shanghai Stock Exchange respectively. With the label of "holding gold nuggets in sand", it has attracted the attention of a large number of investors.


Wind data shows that on the first day of listing, two Saudi ETFs opened higher and closed at the daily limit, with premium rates exceeding 6%, and the total amount of gold attracted on that day was 4.896 billion yuan. As of July 23, the total turnover in six trading days reached 31.6 billion.



What is the magic of Saudi ETF? Can make investors so eager? What are the risks under high premium rate?


"Let's go to Saudi Arabia to get money."


The "market boundary" understands that two Saudi ETFs have been highly concerned by the market before listing.


They were all approved on June 14th and put on sale on June 24th. Before they were officially listed and traded, the total amount raised exceeded 1.2 billion yuan. Among them, the ETF in South Saudi Arabia is 634 million yuan, and the total number of valid subscriptions is 14,253; Huatai Bairui Saudi ETF is 590 million yuan, and the total number of effective subscribers is 7665.


By the first day of listing on July 16, the market had a big explosion directly. According to Wind data, on the same day, two Saudi ETFs opened higher and closed at the daily limit, with premium rates exceeding 6%, and the total amount of gold attracted on that day was 4.896 billion yuan. Behind the huge turnover is a very high turnover rate. Among them, the turnover rate of southern fund Nanfang Dongying Saudi Arabia ETF is over 420%, ranking first in the ETF market, and the turnover rate of Huatai Bairui Nanfang Dongying Saudi Arabia ETF is also over 330%.


As of July 23rd, two Saudi ETFs took six trading days, with a total turnover of 31.6 billion.


During this period, southern fund, Huatai Bairui Fund issued warning notices about transaction price premium risk for many times, but they still did not stop investors' enthusiasm.


Wu Zewei, a researcher at Xingtu Financial Research Institute, told the "City Circle" that the explosion of Saudi ETF was mainly because it provided investors with a tool to allocate overseas assets conveniently and quickly.


For a long time, the public used to describe Saudi Arabia's economic strength with "white cloth covering its head, rich as oil". As the largest economy in the Middle East, Saudi Arabia is the world's largest oil exporter and the second largest oil producer and reserve country, and is known as the local tyrant in the Middle East. The FTSE Saudi Arabia Index tracked by Saudi ETF includes more than 50 large and medium-sized listed companies in Saudi Arabia, covering the representative sectors of Saudi Arabia such as finance, raw materials, energy and communications.


Baidu stock market shows that the FTSE Saudi Arabia index has a bright historical performance. As of the latest, the index has increased by 40% since 2020. Under the background of global stock market shocks in the past few years, its performance has greatly outperformed the FTSE Emerging Markets Index, MSCI Asia Pacific Index, Shanghai and Shenzhen 300 Index, Hang Seng Index and other major indexes. The industry calls it the Saudi version of the "Shanghai and Shenzhen 300 Index".


However, the problem is that the investment threshold for entering the Saudi capital market through the "Saudi Qualified Foreign Investor Program" keeps the vast majority of China investors out. The emergence of Saudi ETF has enabled the public to "make money" in Saudi Arabia through ETF products issued in China market. In addition, cross-border ETFs support T+0 intra-day trading (that is, the shares bought on the same day can be sold on the same day), which can meet the market demand for liquidity and is naturally highly sought after.



Although overseas ETFs are fragrant, don't be greedy.


This is not the first time that overseas ETFs have been out of the circle. Before Saudi ETF, cross-border ETFs such as Nikkei, India, Nasdaq and so on all set off more or less enthusiasm in China. For example, at the beginning of the year, the Nikkei ETF was once exploded to buy a premium of more than 20%; In March, the premium rate of Nasdaq technology ETF exceeded 12%, ranking first among ETF funds.


Qu Fang, an investment consultant of Wanlian Securities, said that Jimin's current purchase of overseas ETFs is based on the following two psychological factors: First, blindly chasing high mentality. In recent years, overseas stock markets hit a new high, and domestic investors pursued short-term profits. The second is the layout and allocation of overseas assets. Domestic investors' demand for overseas asset allocation includes factors such as yield, stability, security and exchange rate. For ordinary investors, the layout of overseas assets is not only a house purchase, but also a good choice to invest in the capital market.


However, after a continuous daily limit and a large premium, the "crazy" Saudi ETF was monitored. On July 18th, a number of brokers, such as SDIC Securities, announced to investors that the recent premium rates of the two Saudi ETFs were high and there was a serious risk of market speculation. Shanghai Stock Exchange and Shenzhen Stock Exchange will strictly identify the abnormal trading behavior of the above securities, and take self-discipline management measures such as focusing on monitoring accounts, suspending account transactions and restricting account transactions as appropriate.


For the measure of "suspending account transactions", some fund people use "directly unplugging the network cable" to describe the regulatory intervention.


In fact, according to the DeepFund of WeChat official account Alpha Workshop, many people don't know that there is an industry secret behind this round of Saudi ETF speculation.


WeChat official account, through the mouth of the industry, concluded that there is a systematic approach to cross-border ETF speculation. The first is to create a high premium. Of course, this index based on its tracking has performed quite well in the past period of time, which has aroused investors' strong enthusiasm for allocation. The second step is to incite emotions, and some so-called "big V" group-building operations have triggered retail investors to enter the market; Finally, the capital game, with large capital entering the market, will "eliminate" the original investors and investors with first-and second-class arbitrage ability.


Many people in the industry also suggested to the "market boundary" that the constant pursuit of overseas ETFs is accompanied by risks for investors.


Wu Zewei said that mainland investors lack investment channels, and it is normal to have a certain premium for this kind of ETF that invests in overseas markets. However, such a sharp rise and fall obviously deviates from the normal trading level of the market. The high probability is the result of short-term capital speculation in the market. The basic people may be more of a pass the parcel mentality, and some investors who don't know the truth may blindly enter the market to chase after the high.


Qu Fang also said that in recent years, with the continuous rise of overseas capital markets, the overall valuation has been obviously high, and the pressure of stock market adjustment is gradually increasing in the short to medium term. As the Fed enters the interest rate cut cycle, the capital flow will be redistributed between developed countries and emerging countries, which will not only lead to fluctuations in the market, but also affect interest rates and exchange rates, thus causing potential asset losses for investors.


It is worth mentioning that, under the eyes of the public, Saudi ETF-related fund companies have become extremely low-key. On the day of listing on July 16th, Li Muyang, assistant director of Huatai Bairui Fund Index Investment Department, visited Xinhuanet to interpret the investment strategy, market prospects and potential investment opportunities of Saudi ETF. On July 22, the relevant personnel expressed their hope to cool down to the "city boundary".


As of July 23rd, the two Saudi ETFs have dropped rapidly from the high level, and both of them have been adjusted back by over 20% compared with the 30% increase in the previous period.


Risk warning and exemption clause


The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.

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