A groundbreaking agreement between Saudi Arabia and Hong Kong promises to escalate direct investment opportunities. The memorandum of understanding, inked with Saudi Arabia’s Minister of Investment, Engineer Khalid bin Abdulaziz Al-Falih in attendance, heralds a new chapter in economic ties.
This pact goes beyond conventional agreements, establishing a robust platform for mutual financial growth. It aims to streamline investment operations between Saudi Arabia and Hong Kong through a shared framework of business regulations. Additionally, the agreement encompasses support for joint exhibitions and work sessions, strategically designed to enhance direct investment through knowledge exchange and collaborative experiences.
The signing of this agreement coincided with a prominent visit by Saudi leaders from government and private sectors to China and Hong Kong, underscoring the pact’s significance. Saudi Arabia’s strategic outreach now includes Hong Kong, a vital special administrative region of China, as a key partner.
In November, Hong Kong’s stock market introduced an exchange-traded fund (ETF) exclusively focused on Saudi Arabia’s equity market. The ETF, tracking the FTSE Saudi Arabia Index, attracted an impressive $1 billion initial investment, becoming one of Hong Kong’s largest market debuts.
Paul Chan, Hong Kong’s Financial Secretary, lauded the ETF’s introduction as a significant achievement. He remarked, “The asset size of this ETF is the largest of its kind in the world, and it can be said to be a practical example of the financial connectivity of the Belt and Road Initiative.” Chan expressed eagerness for further financial collaboration, aiming to expand the scope of financial connectivity and capital circulation.
Strengthening their economic bond, in February 2023, the exchanges signed another memorandum, this time targeting collaboration in emerging sectors like fintech and environmental, social, and governance (ESG) initiatives, with a focus on exploring new listing possibilities.
These agreements signify a dynamic partnership between Saudi Arabia and Hong Kong, reshaping the global investment landscape. This alliance not only strengthens the economic ties between these two regions but also sets a precedent for future international investment collaborations.
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