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cooperation between saudi arabia and china's financial markets is deepening.

recently, saudi arabia plans to issue its first etf investing in hong kong stocks. the manager of the index fund is albilad investment company, which obtained approval from the saudi capital market authority on tuesday.

a reporter from securities china learned that this fund (albilad csop msci hong kong china equity etf) will track the relevant index by investing in the msci hong kong stock connect select etf under csop. the current top ten holdings of the index include techtronic industries, xiaomi group, meituan, china shenhua, anta sports, beigene, haier smart, nongfu spring, shenzhou international, and innovent biologics, etc.

according to bloomberg, the saudi-china-hong kong etf is expected to issue about $400 million and will be listed before the end of this year. in addition, sab invest, a subsidiary of saudi awad bank, is also about to launch an etf tracking the hong kong stock market, which is currently under preparation.

saudi arabia's first hong kong etf approved

recently, the saudi capital market authority announced that albilad investment company, a subsidiary of saudi bank albilad, plans to set up an etf to invest in hong kong stocks, and the application has been approved.

according to the reporter, this etf fund (albilad csop msci hong kong china equity etf) will cooperate with southern asset management co., ltd. to invest in southern asset management msci hong kong stock connect select etf to track relevant indexes. this cooperation mode may be different from cross-listed funds.

on july 4 this year, csop msci hong kong stock connect select etf (3432) was listed on the hong kong stock exchange. according to data, the top ten holdings of the msci hong kong stock connect select index include techtronic industries, xiaomi group, meituan, china shenhua, anta sports, beigene, haier intelligent, nongfu spring, shenzhou international, and innovent biologics.

according to bloomberg, in addition to the above-mentioned saudi china hong kong etf, sab invest, a subsidiary of saudi al owal bank, is also about to launch an etf tracking the hong kong stock market, which is currently under preparation.

saudi arabia and china deepen financial market cooperation

with the establishment of a comprehensive strategic partnership between china and saudi arabia in 2022, the two countries have carried out in-depth exchanges, cooperation in financial markets has become more frequent, and cooperation in the capital market, in particular, has been further deepened.

first, in september 2023, the hong kong stock exchange included the saudi arabian exchange in the list of recognized stock exchanges, allowing companies listed in saudi arabia to list in hong kong for a second time; in november 2023, the only saudi arabia etf in the asia-pacific region, which is also the world's largest saudi arabia etf, launched by china southern holdings was listed in hong kong.

in july this year, huatai-pinebridge and china southern fund issued the first two cross-linked saudi etf funds in mainland china. these two etfs were sought after by market funds when they were first listed on the shanghai and shenzhen stock exchanges. before the end of this year, the above-mentioned msci hong kong stock connect select etfs invested in hong kong, china will be listed on the saudi stock exchange, which means that the saudi and chinese etf markets will truly achieve two-way interconnection.

as early as may this year, yao jiaren, deputy chief executive officer, co-chief operating officer and co-head of markets of the hong kong exchanges and clearing, revealed that the hong kong monetary authority and the saudi central bank are actively promoting cooperation in financial innovation and plan to arrange an etf tracking the hong kong stock index to be listed in the middle east.

on september 5, hong kong special administrative region financial secretary paul chan said at the 2024 bund financial summit that the saudi arabian exchange is expected to launch two etfs that invest in hong kong-listed stocks this year. as an international financial center, hong kong can play an important role in helping the country promote high-level financial opening-up.