The two sides inked a memorandum of understanding (MOU) on Sunday during a visit by a delegation from the Shanghai exchange to Saudi Arabia, the bourse said in a statement on its website on Monday.
Under the agreement, the Shanghai exchange and Saudi Tadawul Group, which owns the Saudi Exchange, will collaborate on cross-listings, financial technology (fintech), environmental, social and governance (ESG) and data exchange. They will share knowledge in the areas of listing businesses and the dual-listings of exchange-traded funds (ETFs), according to the statement.
“Our partnership with the Shanghai Stock Exchange is an important step towards advancing the growth of the Saudi capital market,” said Khalid Abdullah Al-Hussan, chief executive officer of Tadawul Group, in the statement. “This partnership will help facilitate greater connectivity between Saudi Arabia and China and encourage companies in both countries to consider cross-listing.”
Ties between Beijing and Riyadh have warmed up since President Xi Jinping’s visit to Saudi Arabia in December, in which the two nations clinched a slew of jumbo deals ranging from technology to energy and infrastructure. Earlier, Saudi Arabia had agreed to settle trade payments in the Chinese currency, a move that promotes the yuan’s internalisation and threatens the US dollar’s position as the world’s reserve currency.
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China’s Xi Jinping visits Saudi Arabia in bid to boost ties amid strained US-Saudi relations
China’s Xi Jinping visits Saudi Arabia in bid to boost ties amid strained US-Saudi relations
China is the Arab world’s largest trading partner, with total trade reaching US$430 billion in 2022. Saudi Arabia alone accounts for a quarter of the trade between China and Arab countries, according to official numbers from Riyadh.
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Closer links in the financial area are in the interests of both nations. Chinese companies are tapping other overseas fundraising channels amid strained ties with the US, while Saudi Arabia aims to reduce its reliance on oil by attracting investment in emerging sectors such as healthcare, infrastructure and tourism under the nation’s Vision 2030 plan.
Saudi Tadawul was formed in 2021 when the Saudi Stock Exchange was transformed into a holding company. On top of the Saudi Exchange, the company has three other subsidiares that are responsible for the registration of securities ownership, settlement of trades and technology services, according to its website.
Saudi Arabia’s is the world’s seventh-largest stock market with total capitalisations of US$3 trillion, while China is in second place, capitalised at US$9.9 trillion, according to Bloomberg data.
A total of 293 companies were trading on the Saudi Exchange as of the end of July, according to Saudi Tadawul. Its benchmark Tadawul All Share Index has risen 48 per cent this year, beating all of the world’s key stock gauges.
The index’s biggest weighting is the Saudi Arabian Oil Company, known as Saudi Aramco, which is the third-most valuable company globally with a market value of US$2.21 trillion.
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The Shanghai exchange has signed MOUs with 57 overseas peers, with the bourses in London and Switzerland hosting clusters of Chinese companies that trade in global depositary receipts.
