Investment advisers often recommend their clients take an adaptable approach to investing and diversify their asset portfolios, and this applies to countries as much as it does to individuals, families and corporations.
One country that is taking this to heart is Saudi Arabia, long known as one of the world’s biggest oil exporters, which is ploughing funds into its futuristic Neom city, one of the wealthiest football leagues and, most relevant from Hong Kong’s point of view, investments in a wide range of industries.
Building on the successful mission to the Middle East led by Hong Kong SAR Chief Executive John Lee in early 2023, the Hong Kong Trade Development Council’s (HKTDC) Deputy Executive Director Patrick Lau recently visited the Middle East, including Saudi Arabia.
During the visit to Riyadh, Dr Lau met with various businesses, including venture capital firm eWTP, which gave extensive support during Mr Lee’s mission and is a leading participant in HKTDC’s key international conferences, the Asian Financial Forum and Belt and Road Summit.
In another positive outcome from Mr Lee’s visit last year, Saudi Arabia’s Future Investment Initiative (FII) – which prioritises an innovative approach to development in the country and the world at large – chose Hong Kong as the venue for its first Summit in Asia last month.
Saudi Arabia is one of the world’s biggest investors, with its sovereign wealth fund investing US$31.5 billion last year on a wide range of assets worldwide. The Kingdom’s Public Investment Fund (PIF) was the biggest spending sovereign investment fund in 2023, according to consultancy Global SWF. PIF accounted for more than 25% of investment by all the world’s sovereign funds combined.
Hong Kong last year hosted the launch of Asia Pacific’s first Exchange Traded Fund (ETF) to track Saudi Arabian equities, CSOP Saudi Arabia ETF, in November. The signing came nine months after Hong Kong’s stock exchange operator HKEX and its Saudi counterpart Tadawul signed an MoU during Mr Lee’s visit to the Middle East.
Several Middle East business sectors in particular – energy and renewable energy, healthcare and high-tech, infrastructure and finance – had the most to benefit from a Hong Kong listing, according to a recent report, Hong Kong: An Ideal Overseas Listing Venue for Middle East Companies, published by CCB International and the HKTDC. Report findings show that stock exchanges in the Middle East have recently witnessed record-breaking IPOs, with the Saudi bourse ranking among the world’s top 10 in 2022 in terms of IPO funds raised. Saudi firms are now in a position to explore opportunities in overseas listings, including primary, dual-primary and secondary,.with Hong Kong an ideal listing venue.
Discussions at last year’s Belt and Road Summit, organised by the Hong Kong SAR Government and HKTDC, focused primarily on Middle East opportunities and included the Middle East Forum. Saudi government officials, including Fahd bin Abdulmohsan Al-Rasheed, Advisor in the General Secretariat of the Council of Ministers of Saudi Arabia and driver of the NEOM project, addressed the Summit.The Middle East will also be in the spotlight at the Asian Financial Forum later this month.