Hong Kong and Middle East Forge Stronger Ties in Finance and Beyond
As the world’s economic landscape continues to shift, Hong Kong and countries in the Middle East are poised to deepen their collaboration in key areas such as finance, artificial intelligence, logistics, and large-scale infrastructure projects.
A Strong Capital Market for GCC Countries
Government officials from the Gulf Cooperation Council (GCC) countries, comprising Saudi Arabia, United Arab Emirates, Oman, Qatar, Bahrain, and Kuwait, have welcomed investment from Hong Kong, citing the city’s strong capital market as a key factor in raising funds for their projects. Under Saudi Arabia’s Vision 2030 strategy, the kingdom aims to reduce its reliance on oil and boost sectors such as manufacturing, tourism, renewable energy, digital infrastructure, and healthcare – offering ample opportunities for Hong Kong businesses.
Forging Ties through Investment
Hong Kong has been actively seeking to forge ties with the Gulf nations. In late October, Financial Secretary Paul Chan Mo-po led a delegation to the Future Investment Initiative (FII) summit in Riyadh, where the Public Investment Fund, Saudi Arabia’s sovereign wealth fund, and the Hong Kong Monetary Authority agreed to launch a US$1 billion fund to help Hong Kong-based firms grow their presence in the Middle East.
Two-Way Flow of Capital
The listing of two exchange-traded funds (ETFs), valued at a combined US$1.8 billion, on Saudi Arabia’s Tadawul stock exchange during the FII summit marked a significant milestone, allowing Middle Eastern investors to trade Hong Kong stocks for the first time. This completed a two-way flow of capital, following the listing of an ETF tracking Saudi’s top stocks in Hong Kong in November 2023.
Hong Kong: An Ideal Superconnector
Secretary for Financial Services and the Treasury Christopher Hui Ching-yu emphasized Hong Kong’s role as an important hub connecting the mainland, Asia, and global capital markets, making it an ideal superconnector that can address the needs of GCC countries. The room for cooperation between Hong Kong and GCC countries in various fields of the financial services sector, such as securities market, Islamic finance, and asset and wealth management, is enormous.
ETFs: A Key Player in Capital Flows
Ding Chen, CEO of CSOP Asset Management, highlighted the role of ETFs in facilitating capital flows between Hong Kong and Middle Eastern markets. Saudi official Faris Algarni noted that his country is taking steps to attract overseas investments, including introducing a new law that would guarantee investors’ right to remit funds freely and protect intellectual property.
GCC Countries Eye Growth Beyond Oil
Abdulrahman Al-Sowaidi, CEO of Qatar Development Bank, emphasized his country’s focus on growth in sectors other than oil and gas, while Nasser Khalifa Alkindi, CEO of Invest Oman, highlighted the potential for Hong Kong and the GCC to work together on green finance. Younis Haji Alkhoori, undersecretary at the UAE’s finance ministry, noted the potential for collaboration in healthcare, given the ageing population around the world.
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