Other BriefingsShenzhen and Dubai Forge Stronger Financial Ties with New Cross-Border ETF Agreement
The Shenzhen Stock Exchange and Dubai Financial Market recently signed a memorandum of understanding (MOU) to enhance cross-border investing between China and the United Arab Emirates (UAE), with a focus on exchange-traded funds (ETFs), per reporting by the Financial Times. This partnership marks a significant step in the growing financial relationship between China and the Middle East.
Under the MOU, the two exchanges will collaborate on several initiatives, including dual listings, shared displays of indices, and fixed-income offerings. They aim to facilitate investor access to the secondary markets in both nations. Additionally, the exchanges plan to host joint roadshows, seminars, and training sessions to bolster their capital markets, improve trading opportunities for listed companies, and develop market regulations and environmental, social, and governance (ESG) practices.
Hamed Ali, CEO of DFM and Nasdaq Dubai, highlighted the MOU as a critical move towards strengthening cross-border ties, driving global investment opportunities, and enhancing market accessibility.
This agreement comes amid a rising trend of Chinese investors seeking alternatives to slow-moving mainland stocks by exploring new opportunities in the Middle East. The launch of the first two mainland Saudi Arabia ETFs this year, which quickly hit price rise upper limits, reflects the strong interest in these funds. The ETFs have collectively raised more than RMB 1.2 billion (US$167.5 million), underlining the appeal of better returns and exposure to the Saudi Arabian market.
In parallel, Hong Kong regulators have also encouraged asset managers to seize emerging opportunities in both the Middle East and China’s onshore market, following policy measures that have strengthened ties with Gulf countries. This initiative is further supported by a recent MOU between Hong Kong and Abu Dhabi, aimed at advancing investments and fostering closer financial relations between the two regions.
The collaboration between Shenzhen and Dubai is a testament to the deepening financial ties between China and the Middle East, opening new avenues for cross-border investments and reinforcing their positions as global financial hubs.
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