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Saudi Capital Market Forum to Host CONNECT Hong Kong Edition in May

Saudi Arabia represents 70% of the relative weight of the Middle East and North Africa markets in the MSCI Emerging Markets Index. (Asharq Al-Awsat)
Saudi Arabia represents 70% of the relative weight of the Middle East and North Africa markets in the MSCI Emerging Markets Index. (Asharq Al-Awsat)
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Saudi Capital Market Forum to Host CONNECT Hong Kong Edition in May

Saudi Arabia represents 70% of the relative weight of the Middle East and North Africa markets in the MSCI Emerging Markets Index. (Asharq Al-Awsat)
Saudi Arabia represents 70% of the relative weight of the Middle East and North Africa markets in the MSCI Emerging Markets Index. (Asharq Al-Awsat)

Saudi Arabia’s Capital Market Forum is set to enhance ties with China’s capital markets by venturing beyond borders to host the next edition in Hong Kong.
The Capital Market Forum — CONNECT Hong Kong, set for May 9 in the port city, was announced by Khalid Al-Hussan, CEO of Saudi Tadawul Group, during a fireside chat at the Riyadh forum.
The forum, designed to facilitate cross-border investments and foster collaboration, will feature a series of strategic discussions and networking platforms, inviting key financial minds and decision-makers.
Deputy of Financing and Investment Abdullah Binghannam revealed that the Kingdom has commenced its public consultation for the so-called “FMO” framework, aiming to enhance the market’s liquidity and accessibility.
During his participation in a dialogue session within the activities of the Forum, Professor Richard Cormack, Co-Head of Capital Markets in Europe, the Middle East, and Africa and Co-Head of Investment Banking in the United Kingdom at Goldman Sachs, revealed the bank’s expectations that the weight of the Middle East and North Africa markets will reach to 10% on the MSCI Emerging Markets Index, with Saudi Arabia representing 70% of this percentage, according to a research study published by Goldman Sachs.
Cormack stressed that these expectations mean the influx of active and passive investments worth approximately $50 billion into the Kingdom, which contributes to strengthening its position as a leading financial power equivalent to the economic bloc in Latin America, which is considered the largest bloc outside Asia.
Cormack also stressed that the Kingdom continues to record strong performance in line with the performance of advanced financial markets, noting that the profitability factor for stocks traded in the Saudi financial market has reached approximately 21 times, which is the same ratio recorded for stocks traded in the American market.
The Ministry of Human Resources and Social Development and Saudi Exchange signed a new cooperation agreement on the sidelines of the third Saudi Capital Market Forum to launch a Social Responsibility Index.
Furthermore, a memorandum of understanding was signed between the Saudi Tadawul Group and Atrum, supporting artistic initiatives, educational programs, and cultural exchanges within the Kingdom.
SALIC signed an MoU with Tadawul with the aim of establishing the foundations for effective cooperation and integrated coordination between the two parties towards aligning and sharing strategic initiatives in the field of sustainability.
An MoU was signed between Riyad Capital and E Fund to foster knowledge sharing on local investment expertise and stimulate collaboration on developing future investment products.
Meanwhile, the Saudi Capital Market, Muqassa and Swiss cash management company Instimatch Global signed an agreement to launch a Repo Trading Platform for the Kingdom’s market.

 

 

 

 

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China Flags More Policy Measures to Bolster Yuan

People shop around for prosperity decorations for the upcoming Chinese Lunar New Year, at a New Year Bazaar in Beijing, Monday, Jan. 13, 2025. (AP)
People shop around for prosperity decorations for the upcoming Chinese Lunar New Year, at a New Year Bazaar in Beijing, Monday, Jan. 13, 2025. (AP)
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China Flags More Policy Measures to Bolster Yuan

People shop around for prosperity decorations for the upcoming Chinese Lunar New Year, at a New Year Bazaar in Beijing, Monday, Jan. 13, 2025. (AP)
People shop around for prosperity decorations for the upcoming Chinese Lunar New Year, at a New Year Bazaar in Beijing, Monday, Jan. 13, 2025. (AP)

China announced more tools to support its weak currency on Monday, unveiling plans to park more dollars in Hong Kong to bolster the yuan and to improve capital flows by allowing companies to borrow more overseas.

A dominant dollar, sliding Chinese bond yields and the threat of higher trade barriers when Donald Trump begins his US presidency next week have left the yuan wallowing around 16-month lows, spurring the central bank into action.

The People's Bank of China (PBOC) has tried other means to arrest the sliding yuan since late last year, including warnings against speculative moves and efforts to shore up yields.

On Monday, authorities warned again against speculating against the yuan. The PBOC raised the limits for offshore borrowings by companies, ostensibly to allow more foreign exchange to flow in.

PBOC Governor Pan Gongsheng meanwhile told the Asia Financial Forum in Hong Kong that the central bank will substantially increase the proportion of China's foreign exchange reserves in Hong Kong, without providing details.

China's foreign reserves stood at around $3.2 trillion at the end of December. Not much is known about where the reserves are invested.

"Today's comments from the PBOC indicate that currency stability remains an important priority for the central bank, despite the market often discussing the possibility of intentional devaluation to offset tariffs," said Lynn Song, chief economist for Greater China at ING.

"Increasing China's foreign reserves will give more ammunition to defend the currency if the market situation eventually necessitates it."

China's onshore yuan traded at 7.3318 per dollar as of 0450 GMT on Monday, not far from a 16-month low of 7.3328 hit on Friday.

It has lost more than 3% to the dollar since the US election in early November, on worries that Trump's threats of fresh trade tariffs will heap more pressure on the struggling Chinese economy.

The central bank has been setting its official midpoint guidance on the firmer side of market projections since mid-November, which analysts say is a sign of unease over the yuan's decline.

Monday's announcements underscore the PBOC's challenges and its juggling act as it seeks to revive economic growth by keeping cash conditions easy, while also trying to douse a runaway bond rally and simultaneously stabilize the currency amid political and economic uncertainty.

It has in recent days unveiled other measures. In efforts to prevent yields from falling too much and to control circulation of yuan offshore, it said it is suspending treasury bond purchases but plans to issue huge amounts of bills in Hong Kong.

Gary Ng, senior economist at Natixis, said while China's onshore market has a much better pool of yuan deposits, Hong Kong plays a "significant role with higher turnover driven by FX swaps and spot transactions."

"This means that Hong Kong can be a venue for supporting the yuan through trading activities and potential investments."

Data on Monday showed China's exports gained momentum in December, with imports also showing recovery, although the export spike at the year-end was in part fueled by factories rushing inventory overseas as they braced for increased trade risks under a Trump presidency.