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Saudi Arabia, Hong Kong to Establish Fund to Track Stock Indices

CEO of the Saudi Tadawul Group, Khalid Al-Hussan (Asharq Al-Awsat)
CEO of the Saudi Tadawul Group, Khalid Al-Hussan (Asharq Al-Awsat)
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Saudi Arabia, Hong Kong to Establish Fund to Track Stock Indices

CEO of the Saudi Tadawul Group, Khalid Al-Hussan (Asharq Al-Awsat)
CEO of the Saudi Tadawul Group, Khalid Al-Hussan (Asharq Al-Awsat)

The first global edition of the Capital Markets Forum, organized by the Saudi Tadawul Group and the Hong Kong Exchanges and Clearing Limited (HKEX), kicked off in Hong Kong on Thursday, in the presence of over 650 people from around the world, including financial leaders, investors and representatives of regulators and enterprises.
The forum highlights the Hong Kong stock exchange operator’s latest strategy to attract new investors, with the aim to replace stockholders from the United States and Europe who may be deterred from doing business in China at a time of rising geopolitical tensions. Last month, the country's securities regulator said that it would encourage more companies to hold IPOs in the city.
The forum discusses important investment prospects through global partnerships and the means to exploit investment opportunities in the Kingdom and China, as well as studying future investment portfolios.
At the opening of the forum, the CEO of the Saudi Tadawul Group, Khalid Al-Hussan, said that the decision to host the Capital Markets Forum in Hong Kong demonstrates the growing relationship between Saudi Arabia and Asia, adding that the event would constitute a major bridge for investors from the two countries and pave the way for a more integrated system of global capital markets.
“The convergence between Hong Kong’s technological development and the Kingdom’s ambitious economic diversification enables a new era of knowledge exchange and cooperation that extends beyond the capital markets,” he stated.
Al-Hussan explained that during the forum, more than a thousand investors from listed companies and financial industry leaders will gather to explore challenges and prospects in the field of sustainability, innovation, and global investment trends.
For her part, Hong Kong Exchanges & Clearing Ltd. CEO Bonnie Chan said that she expects large initial public offerings (IPOs) to return to the city with the improvement of basic conditions and the support of Chinese regulators.
In her speech during the opening ceremony, she said that the Hong Kong Stock Exchange received more than 100 new listing applications this year, with activity rebounding, especially after the support measures taken by China.
Hong Kong has returned to the radar of global investments, after the China Securities Regulatory Commission (CSRC) announced last month that it would facilitate IPOs in Hong Kong by leading Chinese companies. The regulatory body also announced the expansion of the cross-border investment scheme to strengthen the city’s position as an international financial center.
The new measures began to attract money flows into the market, and trading value rose, Chan underlined, which she said created a more favorable environment for companies to launch their IPOs.
The Hong Kong Stock Exchange has had a difficult time in recent years. The faltering Chinese economy and increasing disputes between Beijing and Washington have exhausted investor interest in China-linked stocks.
Meanwhile, Hong Kong Deputy Financial Secretary Michael Wong said in a statement on Thursday that Hong Kong and Saudi Arabia are exploring the creation of an exchange-traded fund (ETF) tracking Hong Kong indices.
He added that the Hong Kong government is currently working with several financial institutions to develop the ETF.
Wong also reaffirmed Hong Kong’s commitment to its partnership with Saudi Arabia, noting that Cathay Pacific Airways is expected to re-launch direct passenger flights between Hong Kong and Riyadh.

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Saudi Non-Oil Exports Reach Highest Levels Since 2022

A view of the Jeddah Islamic Port. (Asharq Al-Awsat)
A view of the Jeddah Islamic Port. (Asharq Al-Awsat)
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Saudi Non-Oil Exports Reach Highest Levels Since 2022

A view of the Jeddah Islamic Port. (Asharq Al-Awsat)
A view of the Jeddah Islamic Port. (Asharq Al-Awsat)

Saudi Arabia’s non-oil exports have reached their highest levels since the second quarter of 2022, continuing to grow at a steady pace. By the end of the third quarter of this year, non-oil exports, including re-exports, totaled SAR 80 billion (USD 21 billion), reflecting a 16.8% increase compared to the same period in 2023.

This growth aligns with the goals of Vision 2030, which aims to diversify Saudi Arabia’s economy and reduce reliance on oil revenues. Credit rating agency Moody’s recently upgraded Saudi Arabia’s credit rating to AA3 from A1 with a stable outlook, citing the Kingdom’s ongoing economic diversification and the strength of its non-oil private sector. Moody’s projects the non-oil private sector’s GDP to grow by 4–5% annually in the coming years.

According to data from Saudi Arabia’s General Authority for Statistics, non-oil national exports (excluding re-exports) grew by 7.6% in the third quarter of 2024, reaching SAR 57 billion (USD 15.1 billion). Re-exports saw a remarkable surge of 48.4%, amounting to SAR 23 billion (USD 6.1 billion).

In contrast, total merchandise exports dropped by 7.7% to SAR 276 billion (USD 73.5 billion) due to a 14.9% decline in oil exports. As a result, the share of oil exports in total exports decreased from 77.3% in the third quarter of 2023 to 71.3% this year.

Chemical industry products accounted for 25.5% of non-oil exports, growing by 5.3% compared to the same period last year. Plastics, rubber, and their derivatives followed closely, representing 24.9% of non-oil exports, with an 8.9% increase from the third quarter of 2023.

China remained Saudi Arabia’s top export destination, accounting for 15.2% of total exports in the third quarter of 2024. Japan and South Korea followed, at 9.3% and 9.2%, respectively. Other major destinations included India, the UAE, the US, Poland, Egypt, Bahrain, and Taiwan. Together, these ten countries accounted for 66.4% of Saudi exports.

Experts emphasize that the growth in non-oil exports strengthens Saudi Arabia’s economy and reflects the success of its diversification strategy under Vision 2030.

Shura Council member Fadhel Al-Buainain highlighted the importance of considering the scale of Saudi non-oil exports during the third quarter of 2024. He emphasized two key aspects of Saudi non-oil exports.

First, the 16.8% growth achieved is a significant leap that boosts the Saudi economy’s ability to continue strengthening non-oil exports, which are a focal point of Vision 2030 and its economic diversification goals.

Second, he said the 48.4% increase in the value of re-exported goods represents substantial growth, reflecting the Kingdom’s potential to play a pivotal role in regional re-export activities. This, in turn, can stimulate exports and position Saudi Arabia as a global logistics hub.

He further noted that the increase in export value compared to the second quarter of this year, amounting to SAR 37.2 billion (USD 9.92 billion) or 15.6%, indicates sustained and accelerating export growth.

Al-Buainain believes that Saudi Arabia’s ports on the Red Sea and the Arabian Gulf are well-equipped to play a central role in re-exporting, supported by free economic zones, robust infrastructure, and a well-established transportation and logistics network.

He also stated that the improvement in global demand, particularly in the petrochemical sector, which accounted for the largest share of exports, contributed to this growth.

However, the global economic conditions may face certain challenges that will reflect negatively on global demand, he remarked, stressing the importance of diversifying exports.

Dr. Osama Al-Obaidi, an international commercial law consultant and professor, told Asharq Al-Awsat that the significant increase in non-oil exports in the third quarter of this year compared to the same period in 2023 is linked to the growth in petrochemical exports, particularly plastics, rubber, and their derivatives.

He explained that this rise reflects the effectiveness of Saudi Arabia’s economic diversification efforts and its reduced reliance on oil as a sole income source, in line with Vision 2030.

It also highlights the success of the substantial investments made by the government to develop ports and logistics services, such as King Abdulaziz Port in Dammam and Jeddah Islamic Port.

Moreover, improvements in domestic, regional, and international airports, along with initiatives to promote local industries—particularly chemicals, food products, pharmaceuticals, and other high-demand goods in foreign markets—have also played a pivotal role.