Asia's First Saudi Arabia ETF Debuts In Hong Kong, Marking A Key Financial Milestone

The CSOP Saudi Arabia ETF, the first of its kind in Asia, has made a successful debut in the Hong Kong market. This marks a significant strengthening of financial ties between Hong Kong and the Middle East.

What Happened: As reported by the South China Morning Post, the ETF, managed by CSOP Asset Management, saw a 0.8% increase to HK$77.56 ($0.97) per 10 units on its first day of trading. The ETF is based on the FTSE Saudi Arabia Index accessible to foreign investors and is denominated in Saudi riyals.

High-profile launch ceremony attendees included Yazeed Al-Humied, Deputy Governor of the Public Investment Fund (PIF), and Hong Kong’s Financial Secretary, Paul Chan Mo-po. Al-Humied described the ETF debut as a major milestone, enabling increased cross-geographical partnerships for the Saudi sovereign wealth fund.

The ETF aligns with Saudi Arabia’s Vision 2030 objectives, reflecting its commitment to opening its capital market to global investors. Saudi Arabia, the world’s leading oil exporter, saw its economy expand by 8.7% in 2022, surpassing $1 trillion.

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This listing comes ahead of the inaugural FII Priority Conference, a meeting of top officials from Saudi Arabia and Hong Kong, which aims to bolster their economic and business cooperation on Dec 7 and 8.

CSOP’s Saudi ETF mirrors 56 stocks from the FTSE index, which had a combined market capitalization of $276.8 billion as of October 31. This year, the FTSE index has returned 4.6% in U.S. dollar terms, while the Hang Seng Index has dipped 11.2%.

The Saudi ETF is predicted to spearhead more initiatives to boost mutual access between Hong Kong and Saudi Arabia. This listing was possible after the HKEX recognized Tadawul as a stock exchange, rendering the equities investible for local funds and retail investors.

Similar ETFs are already being traded in New York, including the $725.6 million iShares MSCI Saudi Arabia ETF managed by BlackRock and the $17.2 million Franklin FTSE Saudi Arabia ETF managed by Templeton.

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