Financial Frontiers: Hong Kong and Saudi Arabia Bridge Markets
Hong Kong and Saudi Arabia are exploring deeper financial ties, focusing on cross-border financial products amid rising trade uncertainties. New financial instruments like a Saudi government bond ETF and potential listings such as Sukuk bonds and real estate investment trusts aim to enhance capital flows between these markets.
Hong Kong and Saudi Arabia are evaluating opportunities to expand cross-border financial products, as announced by authorities on Thursday. This strategic move seeks to strengthen financial bonds between the two markets amid growing trade challenges.
A new exchange-traded fund tracking Saudi government bonds launched in Hong Kong, marking the territory's first fixed-income fund with such exposure. Additional products, including a Sharia-compliant Sukuk bond and real estate investment trusts, are anticipated to receive approval for cross-market trading, according to Julia Leung, CEO of Hong Kong's Securities and Futures Commission.
The initiative follows the launch of Asia's first ETF tracking Saudi equities in Hong Kong in November 2024. This development highlights the warming diplomatic relations between Beijing and Riyadh, further accentuated by Hong Kong's ongoing efforts to attract a Saudi Aramco listing. Such advancements come amid global trade tensions triggered by U.S. tariff measures blocked by a trade court ruling.
(With inputs from agencies.)
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