Hong Kong is actively seeking to attract fresh capital by strengthening business connections with the Middle East and mainland China, according to the city’s financial chief. Paul Chan Mo-po stated on Sunday that the inaugural Priority Asia Summit, organized by the Saudi-backed Future Investment Initiative Institute and taking place in Hong Kong on Thursday and Friday, is indicative of the city’s ongoing efforts to broaden its partnerships amid geopolitical tensions and global economic challenges.
Recently, the Hong Kong Stock Exchange witnessed the debut of the world’s largest exchange-traded fund focused on Saudi Arabia, marking Asia’s first. This development enables both local and global investors to utilize Hong Kong dollars or renminbi for investments in the Saudi stock market component index within the Hong Kong market. The initiative aims to facilitate participation in Middle East development opportunities.
The minister expressed Hong Kong’s interest in attracting new capital from influential regions such as the Middle East and Asia, both significant contributors to the global economy.
Acknowledging geopolitical uncertainties, he noted that Middle Eastern nations have increasingly recognized the importance of diversifying their investments. Hong Kong, positioned as a crucial hub connecting the mainland, Asia, and global capital markets, is deemed an ideal investment destination.
Highlighting the recent listing of a Saudi exchange-traded fund in Hong Kong, tracking the FTSE Saudi Arabia Index, he anticipates increased capital flows between the two regions. The ETF allows trading in Hong Kong dollars or yuan.
Emphasizing Hong Kong’s significance as a bridge between the Middle East and Asia, the financial chief pointed to the upcoming summit hosted by a Saudi Arabian organization in the SAR later this week.
Chan emphasized that Hong Kong, being a small, fully open, and export-oriented economy, is highly vulnerable to external changes, underscoring the importance of actively seeking new opportunities. The summit is anticipated to feature over 120 speakers, including policymakers, financiers, academics, and business leaders from the mainland, Hong Kong, the Middle East, Europe, the United States, and Southeast Asia.
The event is expected to delve into significant trends like urbanization and digitalization in Asia. Chan described the conference as a high-level summit, noting the participation of Saudi government officials and representatives from the country’s sovereign wealth fund, the Public Investment Fund.
Richard Attias, CEO of the Future Investment Initiative Institute, previously announced that Yasir Al-Rumayyan, the head of the wealth fund with assets exceeding US$700 billion, would lead the Saudi delegation to Hong Kong. The delegation includes Princess Reema bint Bandar Al Saud, the country’s ambassador to the US, and Saudi investment minister Khalid Al-Falih. Attias mentioned that as of November 24, approximately 1,000 individuals had registered for the event.
Financial Secretary Paul Chan confirmed his attendance at the summit. He is set to participate in a plenary session with other speakers, focusing on deepening global economic partnerships to foster more inclusive and sustainable development.
The minister expressed optimism that the debut of the first Saudi Arabia exchange-traded fund (ETF) in Hong Kong, a first for Asia, would strengthen ties with the Middle East. He highlighted the internationalization of the local ETF market with this successful launch. Over the initial ten months of this year, the market’s average daily turnover increased by 25% to HK$11.6 billion compared to the same period last year. Additionally, the minister urged the city to enhance business connections with the mainland, emphasizing recent memoranda of understanding signed during the fifth plenary session of the Hong Kong-Beijing Cooperation Conference.
Professor Ceajer Chan Ka-Keung from Hong Kong University of Science and Technology, a former local treasury minister, asserted that while new growth sources emerged in the Middle East and ASEAN economies, China would continue to be the city’s mainstay market.