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.
