278 ACTIVE GEM FUNDS, AUM $312BN
Saudi Arabia Financials: New Highs
The ownership picture for Saudi Arabian Financial stocks is changing. The addition of Saudi Arabia to the MSCI Emerging Markets index, high oil prices, China concerns and a pullback in Tech have all worked in Saudi’s favour over the last couple of years.
Time Series Analysis & Stock Holdings
Ownership levels in Saudi Arabian Financials have hit new highs. Exposure among active EM funds has charted an aggressively upward trajectory since early 2020, culminating in 33.5% of funds owning a position at an average weight of 0.75%. Despite this strong momentum, EM funds have failed to keep up with increases in benchmark weight, with the current underweight of -1.85% the highest on record.
Of the 13 Saudi Arabian Financial companies that have found investment from the EM funds in our analysis, the top 3 of National Commercial Bank, Al Rajhi Bank and Alinma Bank are the clear favourites. They are owned by more funds and at a higher average weight than peers, though all are held underweight on average versus the iShares EEM benchmark. High conviction positions are led by Somerset and St. James Place 4.9%+ positions in Al Rajhi Bank.
In the full analysis, we look at Saudi Arabian Financials versus the key country/sector peers across global EM, identify the funds that have been buying and the stocks that are benefitting from the recent rotation.
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