Investor Exodus: Foreign investors made a significant retreat from U.S. equity funds linked to Saudi Arabia in October, setting a record for outflows as the region faced its worst violence in decades. The iShares MSCI Saudi Arabia ETF witnessed an unprecedented net outflow of over $200 million, marking a 20% reduction from its holdings at the beginning of the month.
Exchange-traded funds (ETFs) offering exposure to stocks in Qatar, the UAE, and Israel also experienced outflows, driven by concerns about regional instability. Investors, grappling with heightened risks in the Middle East, displayed a cautious approach, leading to muted flows in these regions.
Torbjorn Soltvedt, Principal Analyst for the Middle East and North Africa at Verisk Maplecroft, noted, “Capital flight can be quite indiscriminate. It’s not necessarily 100% based on the fundamentals for each country. And so obviously, right now, there’s a perception that risks are increasing throughout the region. And we’re seeing a negative impact as a result of that.”
The iShares MSCI Qatar ETF lost $7.7 million, while the iShares MSCI UAE ETF suffered outflows of $2.75 million. ETFs tracking Israel, including the iShares MSCI Israel ETF, ARK Israel Innovative Technology ETF, and BlueStar Israel Technology, saw net outflows ranging from $2.5 million to $9.3 million since the October 7 attack by Hamas militants.
Also Read: Japanese Investor Agility: Navigating Global Markets Amidst Yield Surges
The outflows from ETFs tracking Gulf countries significantly surpass those from most emerging markets during the same period. Israel, facing its second bout of turmoil this year, witnessed above-average outflows, impacting its Foreign Direct Investment (FDI) story.
Natalia Gurushina, Chief Economist for Emerging Markets at VanEck, highlighted the blow to Israel’s FDI attractiveness, stating, “The FDI story Israel as a destination for tech investment – this took another hit, and a big one.”
Despite the turmoil, ETFs tracking the region have shown resilience, bouncing back from losses incurred just after the Hamas attack on October 7. However, the cash flight from these ETFs underscores cracks in investor confidence, revealing the persistent risk to regional economies amid ongoing conflicts. The article explores the potential economic impacts on Saudi Arabia and Israel, emphasizing the complexities faced by these economies as they strive for resilience and diversification.
Our Reader’s Queries
What is Exodus investment?
Exodus is a software wallet that was established in 2015. It is designed to make cryptocurrency and digital assets accessible to everyone, without the need for technical expertise. The wallet prioritizes design, ensuring that it is user-friendly and easy to navigate. With Exodus, you can manage multiple assets in one place, making it a convenient option for those who want to simplify their digital asset management.
Can you get money from Exodus?
Exodus Mobile, Exodus Desktop, and Exodus Web3 Wallet offer the option to sell your crypto for fiat currency (cash) and withdraw it to your bank account. This feature is available in the US, Europe, and the UK, and supports USD, EUR, and GBP. With Exodus, you can easily convert your crypto assets into traditional currency without any hassle.
What is Exodus trading?
Exodus empowers you to secure, manage, and swap cryptocurrency across desktop, mobile, and hardware wallets. Our team puts in the effort to perfect every detail, from the smallest pixel to the subtlest sound, to provide a seamless cryptocurrency experience for all.
What if Exodus goes out of business?
In the rare case that Exodus shuts down, you can transfer your cryptocurrency to a new wallet using your 12-word secret recovery phrase. Looking for a wallet that offers complete control over your assets? Download Exodus now.