The Albilad CSOP MSCI Hong Kong China Equity ETF (Albilad ETF), the first fund in Saudi Arabia to track Hong Kong stocks, made its debut on the Saudi Stock Exchange (Tadawul) on Tuesday. This significant listing allows Middle Eastern investors to trade Hong Kong equities more easily.
Early Performance and Fund Details
In early trading, the ETF’s price rose slightly by 0.002% to 10.02 Saudi riyals per unit. Trading under the stock code 9410, the fund successfully raised over $1.2 billion, making it the largest ETF ever listed in the Middle East, according to Bloomberg data. Saudi investors can purchase units starting at 10 riyals (approximately $2.66), allowing access to the 30 largest sharia-compliant companies in Hong Kong.
Listing Ceremony and Future Prospects
Unlike the traditional gong ceremony in Hong Kong for new listings, Tadawul marked the occasion with company executives pressing a button. Hong Kong’s Financial Secretary, Paul Chan Mo-po, attended the listing ceremony with a delegation, expressing optimism for more cross-border listings and investment products between Hong Kong and Saudi Arabia.
“I look forward to more cross-border listings and investment products, enhanced market access, and greater collaboration between the two places,” Chan stated. He also emphasized the ETF’s role in supporting Saudi Arabia’s developing ETF market while diversifying capital sources for Hong Kong.
Key Figures at the Ceremony
Notable attendees included CSOP Asset Management CEO Ding Chen, HKEX Chairman Carlson Tong Ka-shing, and Securities and Futures Commission CEO Julia Leung Fung-yee. During the event, Wong signed an agreement with Saudi incubator Beta Lab, which could provide funding for HKSTP’s 1,200 startups from a $300 million investment fund.
Completing Capital Flows
The launch of the Albilad ETF signifies a complete loop of capital flows between the Middle East and Hong Kong. Last November, CSOP launched a HK$10 billion (approximately $1.28 billion) ETF in Hong Kong that included stocks listed on Tadawul, marking a significant development in Asia’s ETF market.
Top Holdings and Compliance
The Albilad ETF features top holdings in Meituan, Techtronic, and Anta Sports, accounting for 11.4%, 7.4%, and 6.8% of the fund, respectively. Notably, major companies like HSBC, Tencent Holdings, and Alibaba Group were excluded due to non-compliance with sharia requirements, such as interest-bearing activities and certain entertainment ventures.
“Since most retail investors in Saudi Arabia prefer sharia-compliant funds, we needed to create an ETF that meets these standards,” Ding explained in a recent interview.
This launch represents a new chapter for both Saudi Arabia and Hong Kong, enhancing investment opportunities and fostering collaboration between the two regions.
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