Hong Kong is taking another big step to strengthen financial-market linkages with the Middle East with the launch of Asia’s first exchange-traded fund (ETF) tracking Saudi Arabia’s Islamic government bonds, or sukuk.
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The ETF, called Premia BOCHK Saudi Arabia Government Sukuk ETF, started trading on the Hong Kong stock exchange on Thursday, giving local investors access to the world’s second-largest market for sharia-compliant debt securities. The ETF trades in Hong Kong dollars under code 3478 and in US dollars under code 9478.
The fund tracks the performance of the iBoxx Tadawul Government and Agencies Sukuk Index, and includes only investment-grade sukuk issued by the Saudi government or its agencies, denominated in Saudi riyals or US dollars, according to a statement.
The ETF rose 1.8 per cent to HK$82.48 and 1.7 per cent to US$10.52 at the close of trading. The iBoxx index has returned 4.2 per cent this year in local-currency terms, following a 0.4 per cent gain in 2024.
The ETF was launched by Premia Partners, a home-grown ETF provider, and BOCHK Asset Management, a unit of China’s third-biggest lender Bank of China. HSBC will provide cross-border fund services in both financial markets, the statement showed.
‘The idea is to have a range of hot offerings’ that comply with their Islamic faith, Financial Secretary Paul Chan Mo-po says. Photo: Jonathan Wong
The Sukuk ETF is the first of its kind in Asia, adding a new dimension to Hong Kong’s efforts to deepen its financial markets and strengthen investment ties with the Middle East, amid rifts in trade with the US.
