Hong Kong secured billions of dollars in financial commitment from Saudi Arabia after one of the city’s biggest business delegations to the kingdom sealed almost a dozen deals for start-ups and collaboration accords over three days.
Two days earlier, the Saudi incubator agreed to let start-ups at the Hong Kong Science and Technology Park (HKSTP) tap into its US$300 million fund for their expertise in artificial intelligence, food technology and biomedical science. Two exchange-traded funds (ETFs) valued at a combined US$1.8 billion began trading this week on the Tadawul exchange, allowing Middle East investors to tap into Hong Kong’s publicly traded companies.
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“It is not just talk,” Financial Secretary Paul Chan Mo-po said at a media briefing in Riyadh. “We have seen more than 10 multimillion-dollar deals made during the past three days. Many Middle Eastern investors have a great interest in investing in Hong Kong and Chinese companies.”
Hong Kong Science and Technology Parks (HKSTP) CEO Albert Wong Hak-keung (seated, right) and Beta Lab founder and managing partner Abdulrahman Alolayan (seated, left) at a signing ceremony on October 29, 2024 at the FII summit in Riyadh, Saudi Arabia. Photo: Enoch Yiu. alt=Hong Kong Science and Technology Parks (HKSTP) CEO Albert Wong Hak-keung (seated, right) and Beta Lab founder and managing partner Abdulrahman Alolayan (seated, left) at a signing ceremony on October 29, 2024 at the FII summit in Riyadh, Saudi Arabia. Photo: Enoch Yiu.>
The successful trip of 110 officials, executives and start-ups led by Chan was the capstone of two years of bilateral exchanges between Hong Kong and Saudi Arabia that began with Chief Executive John Lee Ka-chiu’s February 2023 trip to Riyadh. This week, Cathay Pacific Airways resumed the direct Hong Kong-Riyadh service that it had halted in 2017.
The direct flight shaved about five hours off the travelling time between the two cities to nine hours, said Chan after flying on the route on Monday. Cathay Pacific is in code-sharing talks with Riyadh Air to expand each other’s route network after Saudi Arabia’s second carrier placed a multibillion-dollar order of 60 Airbus aircraft.
“It would encourage more travelling across the borders” said Chan. “We would like to see Hong Kong talent and companies develop in Saudi Arabia, and we welcome companies and talent from the Middle East to come to Hong Kong.”
(Standing left to right): Hong Kong Science and Technology park’s CEO Albert Wong, Hong Kong’s Financial Secretary Paul Chan Mo-po and Hong Kong’s Belt and Road Commissioner Nicolas Ho at the signing ceremony between the start-up Volar Air Mobility (left) and Saudi Arabia’s Aeronautica (right) on October 29, 2024 in Riyadh. Photo: Enoch Yiu. alt=(Standing left to right): Hong Kong Science and Technology park’s CEO Albert Wong, Hong Kong’s Financial Secretary Paul Chan Mo-po and Hong Kong’s Belt and Road Commissioner Nicolas Ho at the signing ceremony between the start-up Volar Air Mobility (left) and Saudi Arabia’s Aeronautica (right) on October 29, 2024 in Riyadh. Photo: Enoch Yiu.>
Hong Kong’s start-ups got a big break, meeting more than 200 investors in Riyadh to match their expertise in renewable energy, biotechnology, robotics and AI with funders.
AIFT, which provides pet insurance and cybersecurity services, increased its coverage to US$600 million with support from the Saudi reinsurer Walaa, while two start-ups were close to clinching multimillion-dollar investments, according to HKSTP’s chief executive Albert Wong Hak-keung.
“What we are surprised to see on this trip is that Saudi investors are not only interested in green tech or biotechnology but also in construction companies that can support the many infrastructure projects” under the Saudi Vision 2030 programme to transform the kingdom’s economy, Wong said.
In the capital markets, two Tadawul-traded ETFs gave Middle East investors access to Hong Kong stocks, completing the financial loop created when the first ETF of Saudi companies including Aramco was listed last November in Hong Kong.
“Middle East investors want to invest in Hong Kong to diversify their asset allocations”, Chan said. “The rally in September in the Hong Kong and mainland markets attracted investors to return.”
Hong Kong’s deep capital pool also offers fundraising opportunities to Middle East companies via the initial public offerings of equities, or the sale of green bonds.
Middle East companies can tap funding from US and European investors in Hong Kong, as well as mainland investments through the city’s Connect transborder channels, Chan said.
To serve Saudi companies’ fundraising needs, Hong Kong’s stock market operator said it would open an office in Riyadh next year. The Securities and Futures Commission and the Saudi Capital Market Authority (CMA) said they plan to create a strategic partnership to promote cross-border listings of stocks, ETFs, bonds and other financial instruments.
