Last year, CSOP Asset Management launched the first ETF focused solely on Saudi Arabia's equity market in Hong Kong, which attracted $1 billion in investments from institutional investors and has since grown to $1.3 billion.

Hang Seng Investment Management has received approval to launch a Hong Kong-focused exchange traded fund (ETF) in Saudi Arabia, a significant move aimed at enhancing market ties between Hong Kong and Saudi Arabia.

This initiative aligns with Hong Kong's strategy to strengthen relationships with affluent Middle Eastern investors, as highlighted by Chief Executive John Lee in his recent policy address.

In support of this strategy, Hong Kong's Securities and Futures Commission has encouraged local asset managers to explore investment opportunities in the Middle East, reinforcing the city's role as a financial intermediary.

CSOP Asset Management also introduced the first sharia-compliant ETF in Greater China earlier this year, reflecting the increasing trend of Islamic finance in the region.

The new ETF, named SAB Invest Hang Seng Hong Kong ETF, will track the Hang Seng index with stock selections adjusted to comply with sharia investment rules.

Additionally, the Albilad CSOP MSCI Hong Kong China Equity ETF is designed to follow the performance of the MSCI Hong Kong China Connect Select index while adhering to sharia investment guidelines.

While the launch date for the SAB Invest Hang Seng Hong Kong ETF is not yet confirmed, it follows the recent approval of the Albilad CSOP MSCI Hong Kong China Equity ETF, which successfully raised HK$10 billion (approximately US$1.3 billion) from local Saudi investors by October 22, 2024.

Paul Chan, Hong Kong's financial secretary, expressed expectations for reciprocal developments between the two markets during his speech at the Bund Summit in Shanghai in September 2024.