Asia's first Saudi sukuk ETF launched in Hong Kong

30/05/2025 02:07 AST

Hong Kong has launched Asia's first exchange-traded fund tracking Saudi sovereign sukuk, marking a major development in financial cooperation between East Asia and the Middle East.

The Premia BOCHK Saudi Arabia Government Sukuk ETF, listed on the Hong Kong Stock Exchange, follows the iBoxx Tadawul Government & Agencies Sukuk Index. It includes both riyal- and US dollar-denominated sukuk issued by the Saudi government and related agencies.

The ETF is traded under stock codes 3478 for the Hong Kong dollar counter and 9478 for the US dollar counter. It has been approved by the Securities and Futures Commission of Hong Kong. It offers quarterly US dollar distributions, with fees capped at 0.35 percent and an expected annual tracking difference of around -2 percent.

The launch coincided with the opening of the Capital Markets Forum, a two-day event hosted by Saudi Tadawul Group and Hong Kong Exchanges and Clearing Ltd., aimed at boosting cross-border investment.

This year's forum, held under the theme "Powering Connections," focuses on strengthening economic and capital market ties between the Middle East and East Asia.

The ETF is managed by Premia Partners, with BOCHK Asset Management Ltd. serving as investment adviser.

Speaking at the forum, Mohammed Al-Rumaih, CEO of the Saudi Exchange, said the CMF is becoming "a leading global platform for collaboration and dialogue on the future of capital markets and economic transformation."

"We aim to strengthen ties with both local and international investors and to reinforce the Saudi capital market's position as a leading global hub, serving as a bridge between capital markets in the East and West," Al-Rumaih said.

Bonnie Y. Chan, CEO of Hong Kong Exchanges and Clearing Ltd, said that the partnership with Saudi Tadawul Group underscores the strong ties between the two exchanges.

"This second edition of the forum will serve as a dynamic platform to connect our broad base of investors and issuers, while encouraging deeper dialogue and collaboration among the capital-raising hubs of Mainland China, Hong Kong, and the Middle East," Chan said.

The forum featured a series of keynote speeches and panel discussions focused on global economic trends, investment strategies, financial innovation, and the integration of sustainability into financial markets.

As part of the event, the Corporate Access Program enabled direct engagement between investors and senior executives from listed companies and capital market institutions across the region, fostering greater transparency and dialogue.

Commenting on the ETF's launch, Faris Al-Ghannam, CEO of HSBC Saudi Arabia said: "The corridor between China and Saudi Arabia is becoming even more compelling. The resilient activity in the Kingdom's private and capital markets in Q1 reflect Saudi Arabia's position as a refuge for foreign investors from global volatility. The Kingdom's continued liberalization of its foreign investment regulations is also creating new opportunities for investors in Asia and globally."

He said: "Chinese and Saudi Arabian corporates in sectors such as energy, technology and infrastructure are reinvigorating the Silk Road. We expect this trend to continue as tariff uncertainty persists and corporates double down on managing risks and building resilience in their supply chains."

The launch of the ETF, alongside the Capital Markets Forum, reflects Saudi Arabia's commitment to elevating its capital markets on the global stage. These efforts align with the Kingdom's Vision 2030 strategy to enhance financial sector integration and attract foreign investment.

At the same time, Hong Kong continues to strengthen its role as a vital conduit for capital flows between East and West, reinforcing its position as a leading international financial hub.

Arab News