Largest Saudi Stock ETF Has First Outflow on Week of Tanker Fire

(Bloomberg) -- The largest exchange-traded fund tracking Saudi Arabian shares registered the first weekly outflow since its creation as geopolitical tension with Iran escalated.

Investors in the Invesco MSCI Saudi Arabia UCITS ETF, traded in London, pulled out about $426 million last week, a first since the fund’s inception about one year ago. The ETF has around $1.2 billion in total assets and tracks shares trading in Riyadh.

The outflow on Friday was of $211 million, a day after stock indexes across the Gulf slumped after two oil tankers were damaged near the Strait of Hormuz, with Iran later being blamed by the U.S. and the Saudi government. The negative flow added to a $215 million pullout before the attacks happened.

Still, Saudi shares have found strong support from foreign passive investors tracking indexes compiled by FTSE Russell and MSCI Inc., as they started adding the country to their emerging-market benchmarks this year. The Tadawul All Share Index advanced 1.3% as of 2:36pm local time as woes faded over the weekend, extending gains this year to 15%.

To contact the reporter on this story: Filipe Pacheco in Dubai at fpacheco4@bloomberg.net

To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, Kasper Viita, Abbas Al Lawati

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