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.



Oil Prices Steady as Markets Weigh Demand against US Inventories

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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Oil Prices Steady as Markets Weigh Demand against US Inventories

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil prices were little changed on Thursday as investors weighed firm winter fuel demand expectations against large US fuel inventories and macroeconomic concerns.

Brent crude futures were down 3 cents at $76.13 a barrel by 1003 GMT. US West Texas Intermediate crude futures dipped 10 cents to $73.22.

Both benchmarks fell more than 1% on Wednesday as a stronger dollar and a bigger than expected rise in US fuel stockpiles pressured prices.

"The oil market is still grappling with opposite forces - seasonal demand to support the bulls and macro data that supports a stronger US dollar in the medium term ... that can put a ceiling to prevent the bulls from advancing further," said OANDA senior market analyst Kelvin Wong.

JPMorgan analysts expect oil demand for January to expand by 1.4 million barrels per day (bpd) year on year to 101.4 million bpd, primarily driven by increased use of heating fuels in the Northern Hemisphere.

"Global oil demand is expected to remain strong throughout January, fuelled by colder than normal winter conditions that are boosting heating fuel consumption, as well as an earlier onset of travel activities in China for the Lunar New Year holidays," the analysts said.

The market structure in Brent futures is also indicating that traders are becoming more concerned about supply tightening at the same time demand is increasing.

The premium of the front-month Brent contract over the six-month contract reached its widest since August on Wednesday. A widening of this backwardation, when futures for prompt delivery are higher than for later delivery, typically indicates that supply is declining or demand is increasing.

Nevertheless, official Energy Information Administration (EIA) data showed rising gasoline and distillates stockpiles in the United States last week.

The dollar strengthened further on Thursday, underpinned by rising Treasury yields ahead of US President-elect Donald Trump's entrance into the White House on Jan. 20.

Looking ahead, WTI crude oil is expected to oscillate within a range of $67.55 to $77.95 into February as the market awaits more clarity on Trump's administration policies and fresh fiscal stimulus measures out of China, OANDA's Wong said.