Morgan Stanley Allows Foreign Investors in Saudi Equity Fund

Morgan Stanley Allows Foreign Investors in Saudi Equity Fund
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Morgan Stanley Allows Foreign Investors in Saudi Equity Fund

Morgan Stanley Allows Foreign Investors in Saudi Equity Fund

Morgan Stanley Investment Management Inc. announced Tuesday launching a Saudi Equity Fund (MSINVF) in Luxembourg.

It described the step as “positive” and indicates the growth of the local asset management sector in the kingdom.

The MSINVF Morgan Stanley Saudi Equity Fund will give foreign investors access to the company’s on-ground investment team, who have experience in the local market, the bank said in a statement.

Founded in 2009, the fund aims to provide long-term capital appreciation and growth by investing in securities listed on the Saudi Stock Exchange (Tadawul) and in securities offered in the course of an initial public offering in the kingdom.

“We are confident that this launch will create great interest amongst investors and support the attraction of capital inflows into Saudi Arabia as it continues to diversify its economy in line with the Vision 2030,” said Najmul Hasnain, head of Morgan Stanley’s Saudi equity team.

“Our active investment strategy aims to determine attractive returns for our investors by analyzing the data of the listed companies and their operating sectors, as well as the Saudi economy in general.”

Sammy Kayello, chief executive of Morgan Stanley’s Middle East and North Africa unit, said, “Saudi Arabia continues to be one of the most promising capital markets in the Middle East having seen the introduction of a number of significant market initiatives that are expected to drive an increase in company listings.”

Meanwhile, CEO of Morgan Stanley Saudi Arabia Abdulaziz al-Ajaji told Asharq Al-Awsat that the bank looks forward to supporting its international investors by launching the (MSINVF) fund, especially in Europe.

“We seek to continue developing the investment management sector in the kingdom, and the fund will play a major role in achieving that goal.”

Asked about the sectors on which this fund will focus, Ajaji said the team’s strategy focuses on investing in the attractive opportunities presented by the market, regardless of the sector.

The team considers several basic components in the companies the fund owns, he explained.

These include an experienced management team, effective participation by major shareholders, strong sustainable businesses capable of increasing profitability and an attractive assessment compared to similar companies.

Accordingly, “our portfolio is currently focused on education, healthcare, construction materials and companies active in the retail sector.”

Regulatory changes, some of which are incorporated in the Vision 2030, have been a major catalyst in facilitating international investors’ access to local financial markets, Ajaji noted.

Since announcing its Vision 2030, the kingdom has made great strides in developing its local economy and financial markets, he affirmed.

Ajaji pointed to the challenges and obstacles Saudi Arabia has encountered, including the COVID-19 pandemic and the implications of low oil prices on its economy.

“However, it continues to develop its private sector and improve its local financial markets,” he said.



Gold Prices Extend Gains as US-China Trade War Escalates

FILE PHOTO: Gold bars are displayed at a gold jewelry shop in the northern Indian city of Chandigarh May 8, 2012. REUTERS/Ajay Verma/File Photo
FILE PHOTO: Gold bars are displayed at a gold jewelry shop in the northern Indian city of Chandigarh May 8, 2012. REUTERS/Ajay Verma/File Photo
TT
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Gold Prices Extend Gains as US-China Trade War Escalates

FILE PHOTO: Gold bars are displayed at a gold jewelry shop in the northern Indian city of Chandigarh May 8, 2012. REUTERS/Ajay Verma/File Photo
FILE PHOTO: Gold bars are displayed at a gold jewelry shop in the northern Indian city of Chandigarh May 8, 2012. REUTERS/Ajay Verma/File Photo

Gold prices extended gains on Thursday, driven by an escalating trade war between the United States and China, even after President Donald Trump announced a 90-day pause on tariffs for other countries.

Spot gold was up 1% at $3,113.20 an ounce at 0955 GMT, after its biggest daily gain since October 2023 on Wednesday. US gold futures were up 1.6% to $3,129.90.

"We're just living in a world of extreme uncertainty. We just don't really know which way this trade war is going to go ... I think for the course of this year, gold will march higher," said Nitesh Shah, commodities strategist at WisdomTree.

Trump said on Wednesday he would temporarily lower the hefty duties he had just imposed on dozens of countries, but ramped up the tariff on China to 125% from 104% following Beijing's decision to impose an 84% levy on US goods.

The US Federal Reserve's minutes of its meeting last month showed policymakers were nearly unanimous in thinking the US economy faced simultaneous risks of higher inflation and slower growth, with some noting that "difficult trade-offs" could lie ahead for the central bank.

Investors' focus is on US consumer price index data at 1230 GMT to gauge the trajectory of the Fed's monetary policy. The market is currently pricing in 84 basis points of rate cuts by the Fed by year-end.

Bullion is viewed as a safe haven amid geopolitical and economic uncertainties, and tends to thrive in a low-interest rate environment. Spot gold prices have maintained an upward trend from last year, and have risen over 18% this year.

"My forecast (for gold) is for $3,600 in about a year's time with a lot of upside risk, and I wouldn't be surprised if we get to $4,000," Shah said.

Spot silver fell 0.3% to $30.95 an ounce, platinum lost 0.8% to $930.19, and palladium shed 1.9% to $914.20.