Saudi Arabia's first investment in china etf is expected to be listed on October 30, with an estimated fundraising size exceeding 10 billion Hong Kong dollars.

Brokerage China learned that the first Middle Eastern ETF investing in Chinese Hong Kong stocks, Albilad CSOP MSCI Hong Kong China ETF, will be listed on the Saudi Stock Exchange at the end of this month. This may be the largest ETF index fund in the Middle Eastern market, with 95% of the funds invested in the Southern East British MSCI Hong Kong Stock Connect Select ETF ( $CSOP MSCI HK China Connect Select ETF (03432.HK)$ ）。

The first Saudi ETF investing in Hong Kong stocks surpasses 10 billion Hong Kong dollars.

On October 30, the first Middle Eastern ETF investing in Chinese Hong Kong stocks - Albilad CSOP MSCI Hong Kong China ETF is set to be listed on the Saudi Exchange, raising over 10 billion Hong Kong dollars. Bloomberg previously reported that the expected size of the ETF issuance is around 0.4 billion US dollars, but the current subscription enthusiasm has exceeded expectations.

Market analysts believe that after the State Council meeting and the Central Political Bureau meeting on September 24th, foreign investors' interest in investing in China's capital markets has surged. Both A-share and Hong Kong stock investors have regained confidence, hence this Saudi China Hong Kong ETF raised over 10 billion Hong Kong dollars.

It is understood that this may be the largest ETF index fund in the Middle East market. 95% of the funds are invested in the Southern Dongying MSCI Hong Kong Stock Connect Select ETF (03432.HK), which has achieved the effect of tracking the relevant Hong Kong stock index.

The Southern Dongying MSCI Hong Kong Stock Connect Select ETF, which was listed on the Hong Kong Stock Exchange in July this year, has exceeded 10 billion Hong Kong dollars as of October 22nd. Information shows that the top ten major holdings in 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.$INNOVENT BIO (01801.HK)$.

In addition, besides the ETF that invests in Hong Kong mentioned above, a subsidiary of Saudi Arabia's Alawwal Bank, SAB Invest, is also about to launch an ETF tracking the Hong Kong stock market, which is currently still in preparation.

Saudi Arabia has frequent cooperation with the Chinese financial markets.

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 included the Saudi Exchange in the list of recognized stock exchanges, allowing companies listed in Saudi Arabia to have a secondary listing in Hong Kong; In November 2023, the only ETF focused on Saudi Arabia in the Asia-Pacific region, and also the world's largest Saudi Arabia ETF, was listed in Hong Kong by Southern East English.

In July of this year, Huatai Bairui and Southern Fund issued the first two cross-listed Saudi ETF funds in mainland China. These two ETFs were well received by the market when they first listed on the Shanghai and Shenzhen exchanges. At the end of this month, the Albilad CSOP MSCI Hong Kong China ETF will be listed on the Saudi Stock Exchange, making it truly a two-way connection between Saudi Arabia and the Chinese 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 of the Hong Kong Special Administrative Region, Paul Chan Mo-po, 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 a crucial role in promoting high-level financial openness for the country.

Last week, the policy address of the Hong Kong Special Administrative Region Government proposed 'to implement the listing of Exchange Traded Funds (ETFs) tracking the Hong Kong stock index in the Middle East, absorbing local funds to allocate to Hong Kong stocks.' The listing of the mentioned ETFs signifies the formal implementation of this initiative, with reports stating that Financial Secretary Paul Chan Mo-po will lead a Hong Kong delegation to attend the ETF listing ceremony in Saudi Arabia.

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