Hong Kong, Saudi Arabia may approve more cross-border financial products

Hong Kong and Saudi Arabia are considering allowing more cross-border financial products, authorities said on Thursday, as the two markets seek to deepen financial ties amid rising trade uncertainties.

An exchange-traded fund tracking bonds issued by the Saudi government started trading in Hong Kong on Thursday, the first fixed-income fund listed in the territory to offer such exposure.

Apart from the fund, more products - such as a sharia-compliant Sukuk bond and a real estate investment trust - are "in the pipeline" for approval to trade between Hong Kong and Riyadh, said Julia Leung, CEO of Hong Kong's Securities and Futures Commission.

"We're very comfortable in the cross listing of whatever products," Leung told those attending the Capital Markets Forum organised by Saudi exchange operator Tadawul Group.

Hong Kong launched Asia's first ETF tracking Saudi equities in November 2024, as the two markets look to spur capital flows as diplomatic relations warm between Beijing and Riyadh.

In the last few years, Hong Kong has been seen wooing Saudi Aramco to list in the city, a deal that would allow investors in the Asian financial hub easier access to the Saudi state oil giant.

Apart from stocks, there are opportunities for bonds, derivatives and other financial products between Hong Kong and the Middle East, Hong Kong's Financial Secretary Paul Chan said at the forum, when asked about the progress of a potential listing of Saudi Aramco.

The expansion of cross-border products coincides with rising trade tensions after U.S. President Donald Trump unleashed sweeping tariff measures in April roiling global markets.

A U.S. trade court on Wednesday blocked the tariffs from going into effect, ruling that the president overstepped his authority by imposing across-the-board duties on imports from nations that sell more to the United States than they buy.

Asked how countries and companies should navigate the uncertainty of trade deals following the U.S. court block, Chan said the move would "at least bring President Trump to reason".