The Saudi stock exchange will weigh its reforms against the likes of the Hong Kong stock exchange as it bids to become a leading global capital market, according to a top executive of bourse operator Saudi Tadawul Group.
“When we look at reforms and changes in Saudi Arabia, at the top of the list when it comes to benchmarking is HKEX [Hong Kong Exchanges and Clearing] and the experiences they’ve been through,” said Nayef Al-Athel, the chief sales and marketing officer at Tadawul Group.
Al-Athel, a frequent visitor to the city, said Tadawul had “learned a lot” from the Hong Kong bourse operator. He said he particularly admires the exchange’s book-building framework for initial public offerings and its regulations on secondary offerings.
The Tadawul Group wants the Middle East’s largest bourse, where market capitalisation has risen 11 per cent over the past three years, to improve its status as a leading global financial hub. The kingdom is also seeking to open up its stock market to more foreign ownership as part of Crown Prince Mohammed bin Salman’s plan to diversify the economy away from oil under the Vision 2030 strategy.
“We as a capital market group have ambitions to connect East to West. And for us to do so we need the right partners. We think the Hong Kong exchange is definitely the right partner for us to execute that strategy,” Al-Athel said.
Hong Kong is the first international destination for the Tadawul’s flagship Capital Market Forum, which brought together some 300 investors and 650 delegates from the government, finance and business communities. The event saw more than 600 bilateral meetings to help companies and investors understand both markets more effectively.
“We’re very excited with what the forum brings in terms of results and collaboration between Saudi [companies] and investors,” said Al-Athel.
Collaborations between Hong Kong and Saudi Arabia have increased since Chief Executive John Lee Ka-chiu visited Riyadh in February 2023. An example is the listing of the CSOP Saudi Arabia ETF in the city at the end of last year.
There is still room to grow, including bringing more money from Saudi to this part of the world and vice versa, Al-Athel said, adding that Tadawul hopes to capitalise on the momentum generated by the forum and build a bridge to facilitate cross listings and other transactions.
“There’s a strong desire for us to build a bridge between both capital markets, and ecosystems in Saudi Arabia and Hong Kong,” he said.