In a landmark move that underscores the deepening financial links between Asia and the Middle East, Hong Kong has welcomed the listing of Asia's first investment-grade Sukuk exchange-traded fund (ETF) — a timely product launch that not only diversifies Hong Kong's capital market offerings but also opens new doors for institutional investors seeking Shariah-compliant assets.

Launched during the second Hong Kong–Saudi Capital Market Forum on May 29, the Premia BOCHK Saudi Arabia Sukuk ETF was jointly introduced by Premia Partners and Bank of China (Hong Kong). The ETF is authorised by Hong Kong's Securities and Futures Commission (SFC) and closely tracks the iBoxx Tadawul Government and Quasi-Government Sukuk Index, giving investors direct exposure to sovereign and agency Sukuk issued by the Kingdom of Saudi Arabia.

This development comes at a moment when investors are increasingly pursuing diversification and non-correlated returns amid ongoing macroeconomic uncertainty. The product offers both USD and HKD trading counters, reflecting its regional accessibility and global investment appeal.

“This enhanced linkage not only allows investors in both Hong Kong and Saudi Arabian markets to access each other's assets, but also gives fresh impetus to the city's role as a super-connector on the China-Middle East Corridor,”noted Julia Leung, CEO of the SFC, at the forum.

A Strategic Convergence of Regulation and Investment

Beyond the product itself, the day's announcements signaled a deeper regulatory and strategic alignment. Ms. Leung met with Abdulaziz Bin Hassan, Board Commissioner of Saudi Arabia's Capital Market Authority (CMA), to expand regulatory cooperation. Discussions included preparations for a Memorandum of Understanding aimed at streamlining cross-border capital initiatives between the two financial hubs.

The meeting was also attended by top officials including SFC Chairman Dr. Kelvin Wong, Executive Director of Investment Products Ms. Christina Choi, and senior CMA executives — further underscoring the weight of institutional commitment on both sides.

This regulatory alignment aims to facilitate broader access to each other's capital markets, helping to attract global asset managers seeking compliant, efficient platforms for Islamic finance products.

The Rise of Cross-Border ETF Ecosystems

The ETF listing marks the latest milestone in a growing Hong Kong–Saudi financial corridor. In her panel remarks at the forum, Ms. Leung cited several encouraging trends:

The aggregate size of Saudi-listed feeder ETFs investing in Hong Kong equities rose 8% by April 2025.

The Hong Kong-listed Saudi Arabia ETF, along with its Mainland-listed feeder ETFs, grew by 26% and 22%, respectively, since inception.

These numbers point to a burgeoning two-way capital flow between the regions. For global investors — particularly institutional asset managers, sovereign funds, and financial intermediaries — the implications are significant. They now have access to a liquid, transparent vehicle that captures the performance of the Saudi Sukuk market, while also benefiting from Hong Kong's robust regulatory framework.

“In today's volatile market, Islamic fixed income provides a compelling case for investors seeking stable yield with low correlation to conventional global bonds,”said a representative from Premia Partners, noting the ETF's role in offering disciplined exposure to one of the largest issuers of sovereign Sukuk globally.