The cooperation between Saudi Arabia and China's financial markets is deepening.

Recently, the Saudi Capital Market Authority announced that AlBilad Investment Company, a subsidiary of Bank Albilad, plans to establish an ETF investing in Hong Kong stocks in China. This application has been approved.

According to reporters, this ETF fund (Albilad CSOP MSCI Hong Kong China Equity ETF) will cooperate with Southern Dongying Asset Management Co., Ltd. to invest in the Southern Dongying MSCI Hong Kong Stock Connect Select ETF to track the relevant index. This cooperation method is different from cross-listed funds.

On July 4th this year, the Southern Dongying MSCI Hong Kong Stock Connect Select ETF was listed on the Hong Kong Stock Exchange. Data shows that the top ten heavyweight stocks of the MSCI Hong Kong Stock Connect Select Index include$TECHTRONIC IND (00669.HK)$and$XIAOMI-W (01810.HK)$Please use your Futubull account to access the feature.$MEITUAN-W (03690.HK)$N/A.$CHINA SHENHUA (01088.HK)$,$ANTA SPORTS (02020.HK)$and$BEIGENE (06160.HK)$N/A.$HAIER SMARTHOME (06690.HK)$,$NONGFU SPRING (09633.HK)$and$SHENZHOU INTL (02313.HK)$N/A.$INNOVENT BIO (01801.HK)$etc.

It is reported that the expected issuance size of the above-mentioned Saudi China Hong Kong ETF is around 0.4 billion US dollars and will be listed before the end of this year. In addition to the Saudi China Hong Kong ETF mentioned above, a subsidiary of Saudi Owal Bank, SAB Invest, is also about to launch an ETF tracking the Hong Kong stock market, which is currently in preparation.

With the establishment of a comprehensive strategic partnership between China and Saudi Arabia in 2022, the two countries have deepened exchanges, and financial market cooperation has become more frequent, especially the further deepening of cooperation in the capital markets.

In September 2023, the Hong Kong Exchange will include the Saudi Exchange in its list of recognized stock exchanges, allowing companies listed in Saudi Arabia to use Hong Kong as a secondary listing venue; In November 2023, the only Saudi Arabia ETF in the Asia-Pacific region launched by South East Asia, also the largest Saudi Arabia ETF globally, was listed in Hong Kong.

In July this year, Huatai Bairui and Southern Fund issued the first batch of two Saudi ETF funds interlisted in mainland China. These two ETFs were well received in the initial listing on the Shanghai and Shenzhen Stock Exchanges. Before the end of this year, the above-mentioned investment in China Hong Kong MSCI Hong Kong Stock Connect Select ETF will be listed on the Saudi Stock Exchange, truly realizing two-way connectivity between Saudi Arabia and China's ETF market.

As early as May this year, Yao Jiaren, Deputy Chief Executive of the Hong Kong Exchange, Co-Chief Operating Officer and Joint Market Supervisor, revealed that the Hong Kong Monetary Authority and the Saudi Arabian Central Bank are actively promoting cooperation in financial innovation and planning to arrange an ETF tracking the Hong Kong Stock Index to be listed in the Middle East.

On September 5th, Financial Secretary Chen Maobo of the Hong Kong Special Administrative Region stated at the 2024 Bund Financial Summit that it is expected this year that the Saudi Exchange will launch two ETFs investing in stocks listed in Hong Kong. Hong Kong, as an international financial center, can play an important role in helping the country promote high-level financial opening.

Editor/new