Another record year for ETFs?

Global exchange traded funds (ETF) are on course to notch a new record high this year, after inflows rose to USD 129.7 bn in August, despite a summer slowdown and volatility in the market, the Financial Times reports, citing data from BlackRock. While this figure sits below July's record USD 198 bn, it edges YTD inflows to USD 969 bn, well ahead of the USD 848 bn logged by the same point in 2021, the peak year for ETF investments.

Investors favored defensive sectors and fixed income: While technology remained the most popular equity sector, “we have continued to see buying in defensive sectors, in financials and utilities,” head of investment strategy for BlackRock’s iShares arm in the Emea region Karim Chedid said. In fixed income, government bond ETFs — one of the safest among the asset class — attracted USD 18.7 bn, investment-grade corporate bonds took in USD 7.9 bn, and high-yield bonds saw just USD 0.8 bn. ETF demand for gold, another traditional safe haven, has rebounded after a period of outflows, even with gold prices at record highs.

The overall trend for ETF investments this year is an upwards trajectory, possibly encouraged by expectations of rate cuts, Chedid added.

ALSO WORTH KNOWING-

• Oman’s sovereign wealth fund Oman Investment Authority will initiate IPOs in key sectors, including energy, services, and logistics, between 2024 and 2028, as part of its wider divestment strategy, which has already generated over OMR 1 bn. (Statement)
• The Bank of England has scaled back its capital rule changes for UK banks and pushed back the new regime to 2026, easing requirements on small business lending, mortgages, trade finance, and infrastructure loans, with key thresholds rising less than 1% instead of the previously estimated 3%, following industry lobbying and similar moves by US and EU regulators. (FT)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.7% yesterday on turnover of SAR 6.5 bn. The index is down 1% YTD.

In the green: Rasan (+6.9%), Nayifat (+5.7%) and Zamil (+4.3%).

In the red: Al Baha (-5.3%), Sfico (-3.7%) and Jamjoom Pharma (-3.6%).

THE CLOSING BELL: NOMU-

The NomuC rose 0.7% yesterday on turnover of SAR 50.8 mn. The index is up 5.7% YTD.

In the green: ASG (+8.5%), Al Hasoob (+8.2%) and Al Qemam (+7.1%).

In the red: Fadeco (-3.6%), Edarat (-3.5%) and Osool and Bakheet (-3.1%)

CORPORATE ACTIONS-

#1- Paper Home has received CMA approval for a 33% capital increase to SAR 20 mn via the issuance of 500k bonus shares at a rate of 1 share per every 3 shares, according to a CMA statement. The increase will be financed by transferring SAR 5 mn from retained earnings, with Paper Home saying last week that the capital increase looks to support the firm’s expansion and growth.

#2- Derayah Financial is distributing SAR 6.6 mn in dividends at SAR 0.061 per unit to unitholders of Derayah REIT for 2Q 2024, it said in a filing to Tadawul. Distributions will be made within 30 working days of the Wednesday, 6 November entitlement date.

#3- Zamil Industrial Investment will pay SAR 61 mn in Zakat differences for the period spanning 2015 to 2018, following an updated assessment, it said in a filing to Tadawul. After receiving a final calculation letter from the Zakat, Tax, and Customs Authority, the amount was revised from an initially contested SAR 185 mn. The company confirmed it has sufficient provisions to cover the payment, and no material impact is expected on its financial statements.

#4- Albilad Capital has completed the re-balancing of the share basket for Albilad MSCI US Equity ETF to reflect the index constituents as of Tuesday, 10 September, according to a disclosure to Tadawul.

Saudi Awal Bank has rebalanced its MSCI Tadawul 30 Saudi ETF holdings to match the current composition of the index it tracks, it said in a disclosure to Tadawul.