LONDON, 8 December 2007 — HSBC, Europe’s biggest bank, is launching two indexes and associated funds and products that will give international investors exposure to Saudi Arabian equities, HSBC said yesterday.
The Saudi equity market is closed to investors not based in the region but the new HSBC Saudi Equity Index offers a way to gain exposure to 36 stocks ranging from banks to bookstores.
The bank is also launching the HSBC Saudi Petrochemical Equity Index, with 11 shares including SABIC (Saudi Basic Industries Corp.) and SAFCO (Saudi Arabia Fertilizers Co.).
With surging oil prices generating huge revenues, the Gulf region has seen startling economic growth. Gulf countries have seen their economies double in size in 2006 from 2002.
“The Saudi market is currently in a period of rapid expansion and has been a real success story recently,” said Hugh Evans, global head of access products at HSBC. “Saudi represents a large proportion of the market capitalization in the Middle East.” The Saudi general index has been volatile this year, rising sharply in the first three months before losing all of those gains by June. But the index has since climbed 41 percent to 9,892, its highest level since October 2006.
HSBC Saudi Arabia has also launched two new funds complementing the indexes, adding to its existing funds that have over $2.5 billion in assets under management. The bank is also offering participatory notes and swaps to gain access to funds in other Middle Eastern markets.
