Discussions Between China and Saudi Arabia for Mutual Listing of ETFs

Three sources familiar with the matter told Reuters that exchanges in China and Saudi Arabia are in talks to allow mutual listing of exchange-traded funds (ETFs) in each country, as both nations seek to deepen financial ties amid a warming of diplomatic relations. The sources indicated that "the talks are in the early stages and could represent a significant first step from Beijing and Riyadh towards expanding cooperation to include sectors beyond energy, security, and sensitive technology." Two sources noted that "Shenzhen Stock Exchange, one of the two main exchanges in mainland China, is negotiating with the Saudi Exchange, which operates the kingdom's stock market, regarding a program referred to as 'ETF Connect,' indicating a link between their ETFs." For China, such a link with Saudi Arabia would be the first of its kind outside the East Asia region and underscores the country's commitment to opening its multi-trillion-dollar financial markets to international investors. One source mentioned that some of the largest ETF managers in China were informed in recent months about the potential for a mutual listing agreement with Saudi Arabia, and some are currently considering this option.