Hong Kong and Riyadh have strengthened relations in recent years, as the Asian city seeks to attract rich Gulf families and diversify its investor pool. Meanwhile, the oil-rich kingdom has worked to raise foreign ownership and pump liquidity in publicly traded stocks under its Vision 2030 agenda, with Chinese investors seen as central to that plan.
An ETF tracking bonds issued by the Saudi government is set to start trading in Hong Kong on Thursday. It’s the latest offering to join a slew of ETFs tracking Saudi and Chinese shares that have listed in Hong Kong, Shenzhen, Shanghai and Riyadh since 2023, though trading volumes and inflows have remained slim since their debut.
“There seems to be limited organic and natural demand for these products, despite their strong performance, as most the assets under management seems to have come at inception with cornerstone investors including Saudi Arabia’s Public Investment Fund and the Hong Kong Monetary Authority,” said Bloomberg Intelligence analyst Rebecca Sin.
See also: Longer treasuries fall with dollar as Trump moves to fire Cook
HKEX announced in October that it planned to open an office in the Saudi capital in 2025 as it sought to promote “greater connectivity between China and the Gulf region”, according to a statement.
That same month, Hong Kong’s flagship carrier Cathay Pacific Airways started operating three return flights per week between the city and Riyadh.
Hong Kong’s equity market has recovered sharply since Chief Executive John Lee’s visit to the Gulf in early 2023, as Beijing seeks to reinforce the city as a funding hub for its companies. Major new share sales returned to the HKEX this year after a lacklustre period, mostly boosted by offerings from big Chinese firms that are already listed in the mainland.
See also: Analysts see Asian stocks, currencies supported by dovish Powell
Earlier this month, electric-vehicle batteries giant Contemporary Amperex Technology Co. Ltd. (CATL) raised US$5.3 billion in Hong Kong following the world’s largest listing of 2025. Total proceeds raised through equities sales in the city have already reached the highest for a full year since 2021.
Hong Kong’s benchmark Hang Seng Index is up 16% this year, one of the best performers globally, contrasting with a drop of about 8% for the Tadawul All Share Index. A memorandum of understanding to explore cross-listings between the exchanges was signed in 2023, though none have been executed so far.
Chart: Bloomberg
