In a move to bolster financial collaboration, Hong Kong and Saudi Arabia are advancing plans to create investment products that enable capital flow between their respective markets. This initiative was highlighted at the Saudi Tadawul Group’s inaugural Capital Markets Forum held in Hong Kong.
A key development is the introduction of an exchange-traded fund (ETF) that mirrors the Hong Kong benchmark index. Spearheaded by the city’s deputy financial secretary, Michael Wong Wai-lun, this ETF will be listed on the Tadawul stock exchange in Riyadh, offering Middle Eastern investors a gateway to China and Hong Kong’s market growth and corporate profits.
We are working with several financial institutions on the listing of [the] ETF,
Wong stated at the forum, emphasizing the anticipated enhancement of bilateral capital movements.
This forthcoming ETF will complement the CSOP Saudi Arabia ETF that is currently traded in Hong Kong, which has shown commendable performance since its launch, outpacing the Hang Seng Index.
Nayef Saleh Al-Athel, the Saudi Tadawul Group’s Chief Sales & Marketing Officer, expressed optimism about reciprocal efforts, anticipating additional ETF listings in both Saudi Arabia and Hong Kong.
The Securities and Futures Commission (SFC) is also expected to contribute to these efforts, with the regulator’s chief executive planning a visit to the Gulf region. Christina Choi, SFC’s Executive Director of Investment Products, acknowledged the keen interest of Hong Kong asset managers in the Saudi market, citing potential for product innovation and distribution.
Supporting the financial partnership, Hong Kong’s Department of Justice has agreed to collaborate with the Saudi Ministry of Justice on legal matters, and Cathay Pacific Airways is preparing to resume direct flights between the cities, shortening the travel time significantly.
Investment promotion and protection discussions are ongoing between the two regions. Hong Kong intends to enhance its presence in Riyadh by establishing an economic and trade office, following a cooperation accord between InvestHK and the Saudi Ministry of Investments.
The friendship and partnership between Hong Kong and Saudi Arabia will go very far and will endure the test of time,
Wong projected.
The Tadawul’s capital market forum, recently held in Hong Kong, brought together a wide array of delegates and focused on connecting capital markets across China, Hong Kong, and the Middle East. HKEX’s chief executive, Bonnie Chan, highlighted Hong Kong’s strategic role in facilitating these connections.
Emerging sectors in Saudi Arabia and a burgeoning middle class in China present new investment opportunities, according to Chan. The next forum is slated for February in Riyadh, where further integration between the capital markets will be a key agenda, as per Tadawul Group’s chief executive Khalid Al-Hussan.