Saudi Arabia has approved its first exchange-traded funds (ETFs) tracking Hong Kong equities, as announced by the Capital Market Authority (CMA). This marks the introduction of such financial products in the Middle East.
The approval aligns with efforts by Beijing and Hong Kong to strengthen relationships with Arab nations amidst rising tensions with Western countries.
The CMA has authorized AlBilad Investment Company to list the “Albilad CSOP MSCI Hong Kong China Equity ETF” on the Saudi Exchange (Tadawul). The launch date for the fund has not yet been disclosed.
This ETF is a joint initiative with Hong Kong’s CSOP Asset Management and focuses on companies listed in Hong Kong, including Chinese firms.
Last year, Hong Kong introduced Asia’s first ETF tracking Saudi equities, the CSOP Saudi Arabia ETF, and has pursued cross-listing opportunities in both markets since then.
The Hong Kong-listed ETF has grown significantly, reaching nearly $1.28 billion (HKD 10 billion).
Julia Leung, CEO of Hong Kong’s Securities and Futures Commission, recently visited Saudi Arabia to discuss the potential for mutual ETF listings with local officials.
In June, China approved its first ETFs tracking the CSOP Saudi Arabia ETF, aiming to enhance financial cooperation and offer Chinese investors access to Middle Eastern markets.