Middle East Approves First ETFs Tracking Hong Kong-Listed Equities

Middle East Embraces New Investment Opportunities

Saudi Arabia has granted approval for its first exchange-traded funds (ETFs) tracking equities listed in Hong Kong, as announced by the Capital Market Authority (CMA) on Tuesday. This marks a significant milestone for the Middle East, paving the way for such products in the region.

Ties Between Saudi Arabia and Chinese Firms Strengthen

The approval follows concerted efforts by Beijing and Hong Kong to deepen financial connections with Arab countries amid escalating tensions with the West. Specifically, the CMA has backed local asset manager AlBilad Investment Company in launching the Albilad CSOP MSCI Hong Kong China Equity ETF on the Saudi Stock Exchange (Tadawul).

Collaborative Efforts and Market Responses

This initiative is a collaborative effort with Hong Kong's CSOP Asset Management, focusing on Chinese firms within Hong Kong's markets. Coinciding with this, Hong Kong had previously launched Asia's first ETF tracking Saudi equities, signifying a mutual interest in capital market development.

Expansion and Future Collaborations

• The Hong Kong-listed ETF's value has surged to nearly HK$10 billion (US$1.28 billion).
• Julia Leung, CEO of Hong Kong's Securities and Futures Commission (SFC), discussed potential ETF listings during her visit to Saudi Arabia in June.
• China also launched its first two mainland ETFs that track Hong Kong's CSOP Saudi Arabia ETF, emphasizing enhanced cooperation.

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