CSOP's Saudi ETF Debut Strengthens Hong Kong-Middle East Financial Ties

The CSOP Saudi Arabia ETF, heralded as the first exchange-traded fund in Asia that tracks major companies in the Middle East, made a robust debut in Hong Kong. Managed by CSOP Asset Management, the Saudi ETF's successful launch underscores the deepening ties between Hong Kong and Middle East financial markets. Tracking the FTSE Saudi Arabia Index, the fund allows foreign investors access to the Middle East's significant companies, including industry giant Saudi Aramco. The ETF rose by 0.9% to HK$77.60 per board lot of 10 units in Hong Kong, affirming investor interest in the region.

The fund's establishment signifies a milestone in the collaboration between the Middle East and Hong Kong, highlighting common interests between the two regions. The trading debut included the traditional striking of a ceremonial gong at the Connect Hall in Central, attended by notable figures such as Financial Secretary Paul Chan Mo-po and HKEX CEO Nicolas Aguzin. The event marked a tangible step in fostering a partnership between the two regions.

The ETF, based in Saudi riyals, reflects the Middle East's growing significance in the global financial landscape. Saudi Arabia, the world's largest oil exporter, has witnessed substantial economic growth, expanding by 8.7% in 2022 to surpass a trillion dollars in size. The country's "Vision 2030" initiative aims to diversify its economy by reducing reliance on oil income and promoting investments in various sectors, including healthcare, infrastructure, and tourism.

The launch of the CSOP Saudi Arabia ETF is seen as a pivotal moment, unlocking unprecedented opportunities for collaboration between Hong Kong and the Saudi equity market. The Saudi sovereign wealth fund, Public Investment Fund (PIF), is an anchor investor in the ETF, reflecting the strategic importance of this initiative. The ETF's performance will likely be closely monitored as it provides an indirect single-market exposure by mirroring the FTSE index's 56 stocks.

This listing in Hong Kong, facilitated by the addition of Tadawul as a recognized stock exchange by HKEX, is expected to pave the way for further initiatives to foster mutual access between Hong Kong and Saudi Arabia. The success of the CSOP Saudi Arabia ETF's debut positions Hong Kong as a crucial conduit between mainland China and the Middle East, enhancing the city's capital market appeal. As geopolitical and economic ties strengthen between China and Saudi Arabia, the ETF listing is viewed as a precursor to long-term financial cooperation between the two regions.

By fLEXI tEAM