{"id":86032,"date":"2024-05-12T00:00:00","date_gmt":"2024-05-12T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2024\/05\/12\/stock-market-love-in\/"},"modified":"2024-05-12T00:00:00","modified_gmt":"2024-05-12T00:00:00","slug":"stock-market-love-in","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2024\/05\/12\/stock-market-love-in\/","title":{"rendered":"Stock market love-in"},"content":{"rendered":"

The Saudi and Hong Kong finance communities pledged to strengthen ties <\/strong>and <\/strong>talked up their respective IPO books<\/strong> as the Hong Kong edition of Tadawul\u2019s flagship Capital Market Forum wrapped last week. Here\u2019s everything you need to know: <\/strong><\/p>\n

#1- Hong Kong wants to be a gateway to Chinese capital for Saudi companies looking to <\/strong>raise funds<\/strong>, Hong Kong public broadcaster RTHK<\/a> reported, citing statements by Deputy Financial Secretary Michael Wong. Working closer together will help both countries fulfill \u201cambitious goals in finance and well beyond,\u201d Wong said.<\/p>\n

Saudi returned the love: <\/strong>\u201cWe believe Hong Kong is a great partner for us. They\u2019ve been doing a great job in the past few years, and I think they\u2019ve established themselves as a destination for international investors looking to invest in Asia,\u201d the Saudi Stock Exchange CEO Mohammed Al Rumaih said<\/a>. \u201cSo, for us, as a country that is gearing up to become a thriving economy and having the biggest stock market, or the biggest skeletal market, within that time zone, I think Hong Kong is a great partner to connect the Middle East with the East,\u201d he said.<\/p>\n

Hong Kong officials are looking to set up a trade and economy office in Saudi<\/strong>, Wong revealed, without providing further details. <\/p>\n

AND- Hong Kong\u2019s flagship carrier Cathay Pacific will relaunch direct flights to Riyadh<\/strong> in the fourth quarter of this year, he said.<\/p>\n

ANOTHER ETF IN THE WORKS<\/p>\n

#2- An ETF between Saudi and Hong Kong could be in the making: <\/strong>Wong said Hong Kong and Saudi are considering setting up an ETF on Tadawul that would track Hong Kong indexes, according to Reuters<\/a>. No further details were provided, but the Hong Kong government is said to be working with a number of unnamed financial institutions to develop the ETF.<\/p>\n

Discussions are still underway on the ETF<\/strong>, but its launch is \u201cdictated by the appetite of asset managers to do so,\u201d Tadawul Group\u2019s Chief Sales and Marketing Officer Nayef Al Athel told South China Morning Post (watch, runtime: 4:46<\/a>). \u201cWe are in discussions with several global asset managers and asset managers that are based in mainland China and Hong Kong. There is interest, and there is a lot of work being done to try to reciprocate the effort being done in Hong Kong towards Saudi,\u201d Al Athel said. \u201cI am pretty confident that we would see another ETF listing in Saudi and maybe in more ETF listings in Hong Kong.\u201d<\/p>\n

BACKGROUND- <\/strong>The first Saudi ETF in Asia<\/a> debuted in Hong Kong last November. Fund manager CSOP Asset management said at the time it was looking to cross list<\/a> the ETF in Shanghai in the second half of the year. <\/p>\n

The Hong Kong experience:<\/strong> \u201cEvery single regulation that has been implemented on the Saudi exchange, whether it was the IPO book-building frame or the secondary offerings regulations that were recently issued, Hong Kong was part of that benchmark.\u201d Al Athel said.<\/p>\n

IPO WATCH-<\/p>\n

#3- Saudi and Hong Kong are banking on an IPO boom<\/strong>, with Tadawul\u2019s Al Rumaih telling Bloomberg<\/a> on the sidelines of the forum that he expects the IPO bonanza at home to continue with up to 50 companies seeking listings. \u201cWe have more than ten IPOs approved but waiting for book building and dealing with the asset managers to determine listing and offering dates,\u201d Al Rumaih said. \u201cAnd the good thing about those IPOs is not just the number, but the diversity,\u201d he said. \u201cSo they are from different sectors, different sizes in different stage in their life cycle.\u201d<\/p>\n

Hong Kong\u2019s IPO rebound is \u201cinevitable\u201d <\/strong>with listings by leading companies from the region coming to the exchange, South China Morning Post<\/a> reported, citing statements by Hong Kong Exchanges and Clearing Limited (Hkex) CEO Bonnie Chan Yiting. More than 100 listing applications have been submitted to the HKEX this year after officials took steps to make listing easier. \u201cIt is just a matter of time [before] some of the biggest Middle East companies will launch IPOs raising funds in Hong Kong<\/strong>,\u201d she said.<\/p>\n

Making sure everything is in place for cross-listings:<\/strong> \u201cWe want to have a path ready for them in case they decide to do so,\u201d Al Rumaih said when asked about the prospects of cross listings by Saudi companies in Hong Kong or vice versa.<\/p>\n

IN CONTEXT- Hong Kong\u2019s IPO market is off its slowest start since 2009<\/strong>, the Financial Times notes, saying \u201cIPOs in Hong Kong raised a total of USD 604 mn in the first three months of this year, down 29% from last year.\u201d The outlook for the rest of the year isn\u2019t much better: The city will probably face a \u201cdouble whammy of elevated US interest rates and weak confidence in China-related assets\u201d through year\u2019s end, the salmon-colored paper cites one pundit as saying.<\/p>\n

SAUDI IPO PIPELINE AT A GLANCE-<\/p>\n

Among the transactions now in the market or expected soon:<\/strong><\/p>\n