The new ETF would complement the Hong Kong-listed CSOP Saudi Arabia ETF, which tracks 56 Middle East stocks, including the world’s biggest company Saudi Aramco. CSOP’s ETF has risen 9.2 per cent since it began trading in Hong Kong in November, outperforming the 7.8 per cent increase in the Hang Seng Index in the same period.
The Securities and Futures Commission (SFC) may be the next to step up during the visit by the regulator’s chief executive Julia Leung Fung-yee to the Persian Gulf region, scheduled for late May and early June, said the SFC’s Executive Director of Investment Products Christina Choi.
“Most of [Hong Kong’s asset managers] are very interested in the Saudi market, one of the top markets for collaboration and fund distribution,” Choi said during a panel discussion with Fahad bin Hamdan, assistant deputy of financing and investment at the kingdom’s Capital Market Authority.
“Asset managers can create new products, using the [local] expertise of Saudi managers,” in addition to having more of Hong Kong’s financial products in the kingdom, she said.
Formal negotiations for an investment promotion and protection agreement between Hong Kong and Saudi Arabia are under way, Wong said. The city government plans to open an economic and trade office in Riyadh, Wong said, following the December 2023 cooperation accord between InvestHK and the Ministry of Investments of Saudi Arabia (MISA).
“The friendship and partnership between Hong Kong and Saudi Arabia will go very far and will endure the test of time,” Wong said.
Hong Kong is the first international destination for the Tadawul’s flagship capital market forum. This year’s edition brought 1,000 delegates from the government, finance and business communities to the HKEX Connect Hall in Central.
Carrying the theme “powering connections,” the forum focused on bridging investors and issuers to connect the capital-raising hubs of mainland China and Hong Kong with the Middle East. The HKEX accord with Tadawul opened the door for Tawadul-listed companies to mount secondary listings, or so-called dual primary listings, in Hong Kong.
As an international financial centre, Hong Kong has a unique role in connecting the world and mainland China, said HKEX’s chief executive Bonnie Chan.
“China and Saudi Arabia are both undergoing fantastic economic transformation, and that brings a lot of very interesting opportunities for households and people,” Chan said.
Emerging sectors like telecommunications, tech innovation and manufacturing in Saudi Arabia present new opportunities for investors on our side of the world. A growing middle-class population and wealth accumulation in China is phenomenal, creating demand for diversification, she said.
The next edition of the Capital Market Forum will take place on February 19 and 20 next year in Riyadh, said the Tadawul Group’s chief executive Khalid Al-Hussan.
“We’re not only working to attract investors,” he said. “We’re working towards more conductivity and integration between the two capital markets.”