The Shanghai Stock Exchange signed an agreement with the Saudi stock exchange operator to strengthen relations, which is simply a sign that cooperation between China and Saudi Arabia has expanded into a financial area.
As we learn from the Shanghai Stock Exchange message published last Monday, both parties signed the Memorandum of knowing on Sunday, September 3, during a visit from Shanghai Stock Exchange officials to Saudi Arabia.
In February this year, the analogous MoU Saudi Tadawul Group signed with the Hong Kong Stock Exchange BoardAccording to the signed protocol, the Shanghai Stock Exchange and the Saudi Tadawul Group, which owns the Saudi Exchange, will cooperate in cross-quoting, financial technology (fintech), environmental protection, social affairs and corporate governance (ESG) and data exchange. According to the statement, they will share their cognition of company listings and dual stock exchange fund listings (ETFs).
“Our partnership with the Shanghai Stock Exchange is an crucial step towards the improvement of the Saudi capital market“ – Khalid Abdullah Al-Hussan, CEO of Tadawul Group, stated in a statement. “This partnership will aid facilitate greater connectivity between Saudi Arabia and China and will encourage companies in both countries to consider putting stock on the stock market“.
Saudi Tadawul was created in 2021, erstwhile the Saudi Stock Exchange was converted into a holding company. In addition to the Saudi Exchange, the company has 3 another subsidiaries, which are liable for securities ownership registration, transaction clearing and technology services.
According to Bloomberg, the Saudi Exchange is the world's seventh largest stock exchange with a full capitalization of US$3 trillion, while China ranks second with a capitalization of US$9.9 trillion.
According to Saudi Tadawul, 293 companies were listed on the Saudi stock exchange at the end of July. Her Tadawul All Share Index increased by 48 percent this year, beating all the world's most crucial stock indices.
The largest share of the index is Saudi Arabian Oil Company, known as Saudi Aramco, which is the 3rd most valuable company in the planet with a marketplace value of $2.21 trillion.
Closer links in the financial area are in the interests of both countries. Chinese companies search alternate backing channels in the face of strained relations with the US, while Saudi Arabia seeks to reduce its economical dependence on oil by attracting investment in developing sectors specified as healthcare, infrastructure and tourism under the National imagination 2030 Plan.
The relation between Beijing and Riyadh has warmed up since president Xi Jinping's December visit to Saudi Arabia, during which both countries made a series of large transactions, ranging from technology to energy and infrastructure.
Previously Saudi Arabia agreed to settle commercial payments in Chinese currency, which favours the internalisation of yuan and threatens the position of the US dollar as a planet reserve currency.
China is the largest trading partner in the arabian world, and the full trade between the parties in 2022 reached US$430 billion. According to authoritative data from Riyadh, Saudi Arabia is liable for a 4th of trade between China and arabian countries.
The Shanghai Stock Exchange has so far signed MoU protocols with 57 abroad partners, and exchanges in London and Switzerland host clusters of Chinese companies that trade global deposit receipts.
Source: SCMP
Leszek B. Glass
Email: [email protected]
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