HKEX Insight

Since 2022, there have been many high-level exchanges between government officials, business leaders and policymakers from Hong Kong, Mainland China and the Middle East, yielding results such as a China-Saudi Arabia strategic partnership and 13 MoUs signed during the Hong Kong Chief Executive’s trip to Saudi Arabia and the United Arab Emirates in February 2023.

In the short time since our engagements began, HKEX, as an exchange operator and regulator, has made progress in building cross-region connectivity.

In February 2023 we signed a MoU with STG, have shared knowledge and best practices, opened the door for secondary listings by Saudi-listed companies by adding STG as a recognised stock exchange in September 2023, and listed APAC’s first and the world’s largest Saudi-focused ETF in Hong Kong in November 2023.

There’s further progress happening outside of HKEX too.

For instance, the Hong Kong Monetary Authority is working with the Saudi Arabia Central Bank on financial innovation and is also developing plans for the listing in the Middle East of a Hong Kong-focused ETF.

And the Hong Kong Science and Technology Parks Corporation has signed partnership and collaboration agreements with innovation and technology leaders in Saudi Arabia, Qatar and the United Arab Emirates.

Financing energy transition projects is costly, and having access to multiple sources of funding beyond domestic markets is crucial. With an onshore capital market that’s set to grow to US$100 trillion in the next decade, China can provide the additional funding needed to support the Gulf’s efforts to incubate new sectors.

China’s dominance in the clean energy supply chain opens the door for collaboration in technological innovation. In 2022, China invested US$546 billion in energy transition, nearly four times as much as the US. And it is a leader in key technologies such as EV batteries and solar energy.

More collaboration on this front would be good news for technological advancement, as well as for commerce and climate action. And there is room for collaboration beyond green energy, given the regions’ shared endeavours in infrastructure, healthcare and digitisation.

To meet the demand for financing from companies operating in clean tech and energy transition sectors, HKEX introduced a new listing chapter, 18C, in 2023 to open new routes to capital for companies in specialist technology sectors including new energy and environmental protection, advanced materials, agricultural technologies and next-generation information technologies.

Our Connect programmes also provide international investors easy access to China’s markets, with Northbound and Southbound channels linking Hong Kong with onshore markets and we are constantly enhancing the programmes’ product ecosystem and trading mechanisms to provide more opportunities for investors and issuers. For instance, in March 2023 Southbound Stock Connect was expanded to include international companies with a primary listing in Hong Kong.

That means Hong Kong is home to the only market in the world offering connectivity to two massive, uncorrelated pools of capital.