Saudi ETF Tracking Hong Kong Stocks Approved, Top 10 Stocks Familiar

Saudi Arabia's First ETF Tracking the Hong Kong Market is Here!

The Saudi Capital Market Authority recently announced that it has approved an ETF fund investing in Hong Kong stocks.

The ETF is managed by Albilad Capital and is called "Albilad CSOP MSCI Hong Kong China Equity ETF."

It is planned to be listed and traded on the Saudi stock exchange, tracking the MSCI Hong Kong Connect Selected Index.

According to a statement on Tuesday, the ETF to be launched by Albilad Capital is expected to raise up to $400 million and will be listed by the end of this year.

In addition, foreign media cited sources as saying that another Saudi exchange-traded fund tracking stocks listed in Hong Kong is expected to raise about $500 million.

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It is reported that the fund will be launched by SAB Invest, a subsidiary of Saudi Awwal Bank, by the end of this year.

Deliberations are ongoing, and the ETF size and listing time may change.

As early as May this year, Hong Kong's Deputy Financial Secretary Wong Wai-lun revealed that Hong Kong is working with several financial institutions to launch an ETF tracking the Hong Kong stock index in the Middle East, further strengthening the capital flow between Hong Kong and the Middle East.

Historical data shows that Middle Eastern capital has always favored the Hong Kong stock market.

Over the past years, the wealthy investors from the Middle East have had successful investment experiences in the Hong Kong stock market.

The first Saudi ETF tracking the Hong Kong stock market was approved by the Saudi Capital Market Authority (CMA), which recently announced on its official website the approval of a new ETF called Albilad CSOP MSCI Hong Kong China Equity ETF.

This ETF is managed by the securities department of Albilad Bank, Albilad Capital, and will track the performance of stocks listed in Hong Kong and plans to be listed on the Saudi exchange.

This is the first time Saudi Arabia has approved an ETF tracking the Hong Kong stock index, marking the opportunity for Saudi investors to directly invest in stocks in the Hong Kong market.

The approval of this ETF is the result of the cooperation between Albilad Capital and CSOP Asset Management.

Data shows that CSOP Asset Management is one of the leading ETF providers in Asia.

In November last year, it launched the first ETF in Asia tracking Saudi stocks - CSOP Saudi Arabia ETF, raising more than $1 billion.

Since its listing, the CSOP Saudi Arabia ETF has risen by about 7.61%.

Albilad Capital CEO Zaid AlMufarih said that the fund adds a new and unique investment choice to the ETF field, enhancing the depth of the Saudi ETF field.

It also provides the opportunity to participate in the world's fastest-growing emerging market.

China is known for its huge economy, the world's second-largest economy, and continues to grow at an accelerated rate.

In addition, the Chinese market has a low correlation with the global main market, providing a unique tool for investment diversification.

It is reported that the ETF will adopt a passive investment strategy, intending to replicate the performance of the "MSCI Hong Kong China Connect Select Index."

The index includes dozens of large Chinese company stocks listed on the Hong Kong Stock Exchange that meet the Islamic Committee's criteria.

According to the MSCI official website, as of the end of August 2024, the top ten heavy stocks of the index include: Techtronic Industries, Xiaomi Group, Meituan, China Shenhua, Anta Sports, BeiGene, Haier Smart Home, Nongfu Spring, Shenzhou International, and Cinda Biotech.

It is worth noting that in June this year, the first two ETFs in China to invest in the Saudi market - Huatai-PineBridge CSOP Saudi Arabia ETF (QDII) and Southern Fund CSOP Saudi Arabia ETF (QDII) - were also approved and quickly launched, further deepening the financial cooperation between China and Saudi Arabia.

Since the listing, the above two ETFs have fallen by 0.10% and risen by 0.30%, respectively.

According to foreign media reports, it is expected that there will be another ETF tracking the Hong Kong stock market in the Saudi market, launched by SAB Invest, a subsidiary of Saudi Awwal Bank, expected to raise about $500 million.

Industry insiders pointed out that the launch of these products is not only the latest sign of the increasingly close relationship between China and Saudi Arabia but also reflects the growing demand for international and diversified investment products in the Saudi capital market.

Hong Kong's Deputy Financial Secretary Wong Wai-lun once publicly stated that Hong Kong can provide a great financing platform for Saudi companies to help international capital expand their business.

Hong Kong has a highly open and international market and a regulatory system consistent with overseas markets.

The market value of Hong Kong stocks is more than 10 times that of Hong Kong's GDP, and it also has a thriving bond market.

Therefore, Hong Kong is an ideal stepping stone for Saudi companies to enter the Chinese mainland market.

"Since 2014, China's capital market has gradually expanded from stocks to bonds, to wealth management products, to ETFs, and to derivatives such as interest rate swaps.

These plans have allowed huge capital inflow from the Chinese mainland to Hong Kong.

Taking stock connections as an example, southbound transactions have brought more than $38 billion of net inflow to the Hong Kong stock market."

Wong Wai-lun said.

The Middle East capital is closely connected with the Hong Kong stock market.

Historical data shows that as a super connector of the mainland and Middle East financial markets, the Hong Kong stock market has always been "throwing money" by the Middle East tycoons.

Many Hong Kong-listed companies have received investment and support from Middle East capital, such as Fengxiang Shares.

Last year, the company announced that it has conditionally agreed to issue and allot shares to Subscriber A and Subscriber B, with the number of subscribed shares being about 160 million and 26 million shares, respectively.

Subscriber A is Platinum Peony B 2023 RSC Limited, a wholly-owned institution of the Abu Dhabi Investment Authority, which bought nearly 157 million shares of Fengxiang Shares, with an average price of 1.5132 Hong Kong dollars per share.

Another example is the Saudi Arabian Investment Department (MISA), Fortune Hotel, and Four Seas International, which announced on December 22 last year that they had signed a memorandum of understanding and became strategic partners to jointly cooperate in hotel development and management projects.

The purpose is to acquire, develop, and manage a series of sustainable hotels, serviced apartments, and innovation centers under the "Fortune" brand of Fortune Hotel.

According to preliminary estimates, the scale of the cooperation investment is about $5 billion.

Haichang Ocean Park also announced in the same month that it had recently signed a non-binding memorandum of cooperation with the Saudi Tourism Development Fund to develop Haichang Ocean Park in the Kingdom of Saudi Arabia according to the Saudi tourism strategic cooperation.

In December last year, Kingdee International announced the introduction of strategic investor AI-Rayyan Holding LLC, which is a subsidiary of the Qatari sovereign wealth fund Qatar Investment Authority.

The institution will invest about $200 million (about 1.56 billion Hong Kong dollars).

According to the subscription agreement, Al-Rayyan Holding LLC subscribed to the shares issued by Kingdee International at a price of 10.1 Hong Kong dollars per share.

After the transaction, Al-Rayyan Holding LLC holds 4.26% of the total share capital of Kingdee International after the issue.

The Qatar Investment Authority also participated in the cornerstone of WuXi AppTec through Al-Rayyan Holding LLC, holding a total of 17.086 million shares at the issue price of 20.6 Hong Kong dollars, with a position value of 352 million Hong Kong dollars.

In addition, the Qatar Investment Authority also participated in the cornerstone investor subscription of Fuxing Hanlin and Chuangsheng Group-B in September 2019 and September 2021.

The Qatar Investment Authority is also a major shareholder holding more than 5% of the shares of Hong Kong Electric - SS, holding 1.758 billion shares directly, accounting for 19.90% of the issued common shares.

Middle East tycoons also aim at the new energy vehicle track, and they have invested in NIO twice last year.

On June 20, 2023, NIO announced that it had signed a share subscription agreement with Abu Dhabi investment institution CYVN Holdings.

According to the agreement, CYVN Holdings will make a total strategic investment of about $1.1 billion in NIO through the directed issuance of new shares and the transfer of old shares.

Subsequently, NIO received investment from CYVN Holdings again on December 18 of the same year.

According to the share subscription agreement, CYVN will invest a total cash amount of $2.2 billion to subscribe to 294 million newly issued Class A common shares of the company at a purchase price of $7.50 per share.

The total investment amount of the two investments reached $3.3 billion.

Looking back further, Middle East capital has accumulated rich investment experience in the Hong Kong stock market.

As early as the IPO of China Cinda in the Hong Kong stock market in 2013, the investment institution of Abu Dhabi participated as a cornerstone investor.

In 2020, when LeXiang Group went public in the Hong Kong stock market, Capital Investment LLC of the Abu Dhabi Capital Group also appeared as a cornerstone investor.

The Qatar Investment Authority, a Middle East sovereign wealth fund, also has significant investment footprints in the Hong Kong stock market.

In addition to the above-mentioned, in 2014, Real Reward sold a 19.9% stake in Li & Fung International to Bellshill Investment Company Limited, a subsidiary of the Qatar Investment Authority, at a price of 14.75 Hong Kong dollars per share, involving a total amount of 4.783 billion Hong Kong dollars.

In 2017, Qatar Airways became the third-largest shareholder of Cathay Pacific at that time by purchasing a 9.61% stake in Cathay Pacific held by Kingboard Group and its subsidiary Kingboard Laminates for 5.162 billion Hong Kong dollars.当然可以，不过您还没有提供需要翻译的内容。请提供您想要翻译的文本，我会帮您翻译成英文。