China-Middle East link is creating an ‘untapped world’ of investment potential, MSCI’s Wei says
- Two regions can revitalise historical connections through financial collaboration, but more understanding is needed, an MSCI’s managing director says
- ‘There will be more connectivity that will bring the capital to meet with the end investors,’ says Wei Zhen
China and the Middle East have the potential to revitalise their historical link through financial collaborations, but more mutual understanding is needed, according to Wei Zhen, a managing director at MSCI.
The index provider, which first included Saudi Arabian stocks in its Emerging Markets Index in 2019, has helped to put the kingdom on the map of international investors, as the index provides a benchmark to gauge the market’s movement and performance.
As the relationship between China and the Middle East continues to deepen, capital market investors will be presented with more financial products and investment opportunities.
That scenario is an “untapped world”, Wei said, because few Chinese investors previously paid attention to Saudi Arabia – and vice versa. Both communities have a learning curve to conquer in terms of not only the investment landscape but also investor preferences.
“Chinese investors will increasingly find familiarities with assets, [companies] and targets in Saudi Arabia and the Middle East, while the Middle East and Saudi investors need to build familiarities with the assets here,” he said.
China has become the largest greenfield foreign direct investor in Saudi Arabia. Its investment in the kingdom increased 11 times to US$16.8 billion in 2023 compared with the previous year, according to a report from Emirates NBD.
