Facilitating Middle East Capital Allocation into Hong Kong Stocks via the Tracker Fund of Hong Kong
HONG KONG, Oct. 30, 2024 /PRNewswire/ -- Hang Seng Investment Management Limited ('Hang Seng Investment') is pleased to announce its collaboration with SAB Invest, a subsidiary of The Saudi Awwal Bank in Saudi Arabia, and the launch of a new feeder Exchange-Traded Fund ('ETF') – the SAB Invest Hang Seng Hong Kong ETF by SAB Invest. The ETF is set to debut on the Saudi Exchange (Tadawul) on 31 October 2024. It will fully invest into the Tracker Fund of Hong Kong ('TraHK' – Stock code: 2800.HK), offering Middle Eastern investors a unique opportunity to access Hong Kong's dynamic capital market.
Diana Cesar, Executive Director and Chief Executive of Hang Seng Bank along with senior management from Hang Seng Investment and Hang Seng Indexes Company, is a part of the business delegation to Riyadh, Saudi Arabia, led by the Financial Secretary of the Government of the Hong Kong Special Administrative Region. This visit highlights Hang Seng’s efforts to explore the significant business opportunities in the region.
Rosita Lee, Director and Chief Executive Officer of Hang Seng Investment, said, "Hang Seng Investment is delighted to collaborate with SAB Invest on this exciting initiative. The selection of TraHK as the underlying investment for an ETF outside of Hong Kong highlights its appeal to international markets. The launch of the SAB Invest Hang Seng Hong Kong ETF represents a significant step towards strengthening the financial bridge between Hong Kong and the Middle East, providing investors with a strategic gateway to the growth potential of Hong Kong and mainland China's capital markets. Leveraging Hong Kong's position as a leading international financial centre and its role as a super connector between mainland China and the world, Hang Seng Investment will continue to explore further opportunities in the global ETF market and facilitate cross-border capital flows."
Ali AlMansour, Managing Director and Chief Executive Officer of SAB Invest commented, "We are extremely proud to announce the launch of this ETF in collaboration with Hang Seng Investment, the largest ETF manager in Hong Kong. This launch demonstrates SAB Invest's commitment to delivering cost-effective, transparent, and liquid investment options that meet the rising demand for global diversification. For Saudi investors, the SAB Invest Hang Seng Hong Kong ETF offers a streamlined, efficient way to engage in a vibrant market. This initiative is a reaffirmation of our goal to provide investors with global investment solutions and access to high-quality and unique opportunities across the globe. The listing of this ETF will also bring numerous benefits by enhancing the investment climate in the Kingdom, widening available markets and instruments for local investors for the development of the capital market, and attracting and localizing foreign investments. It also symbolizes the deepening partnership between Saudi Arabia and China."
Howard Lee, Deputy Chief Executive of the Hong Kong Monetary Authority said: "We are pleased to see the collaboration between Hang Seng Investment and SAB Invest. The launch of the ETF in Saudi Arabia provides an opportunity for Saudi Arabia as well as Middle Eastern investors to have exposure to the Tracker Fund of Hong Kong, which invests in the largest and most established listed companies in Hong Kong. The Hong Kong Monetary Authority is very glad to support this launch which further demonstrates the strength and competitiveness of Hong Kong as an international financial centre."
As of the end of September 2024, Saudi Arabia's market capitalisation totalled USD 2.69 trillion, making it the largest in the Gulf Cooperation Council (GCC) region and accounting for 65% of the region's total market capitalisation. This reflects not only the current financial strength of the Saudi Arabia but also as a driving force for economic growth and stability in the region. As of September 2024, there are nine ETFs listed on the Saudi Exchange (Tadawul), primarily focused on Saudi and US equities as well as fixed income.
TraHK, first launched in 1999, is the largest ETF in Hong Kong in terms of assets under management (AUM) and turnover. As of September 2024, its AUM stood at HKD 166 billion (USD 21 billion). The introduction of the SAB Invest Hang Seng Hong Kong ETF, which fully invests into the TraHK, highlights the performance of the Hang Seng Index, the most widely quoted gauge of the Hong Kong stock market. This new ETF offers diversified exposure to key sectors of the mainland China and Hong Kong economy, providing Middle Eastern investors with a wide range of opportunities in both mainland China and Hong Kong capital markets. This initiative aligns with the 2024 Policy Address, which aims to attract new overseas capital and boost investment in Hong Kong stocks.
