Saudi and Chinese bourses to explore cross-listings

Shanghai Stock Exchange

Saudi Tadawul Group and Shanghai Stock Exchange have signed a memorandum of understanding to promote mutual development and collaboration – a sign of deeper ties between the kingdom and the world’s second largest economy.

The two exchanges will explore opportunities in cross-listing, fintech, ESG, data exchange, and research, the Shanghai Stock Exchange said in a statement.

The partnership will also facilitate knowledge sharing in listing businesses, dual listings of exchange-traded funds (ETFs), and investor relations initiatives, while developing the infrastructure of both capital markets.

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• Saudi bourse owner’s profit dips 24% to $28m in Q2 2023

Cai Jianchun, president of the Shanghai Stock Exchange, said the agreement will further strengthen the cooperation between China and the Saudi capital market, adding it will work closely with the Saudi Tadawul Group to advance ETF and other products.

The partnership will help facilitate greater connectivity between Saudi Arabia and China and encourage companies in both countries to consider cross-listing, added Khalid Abdullah Al-Hussan, CEO of Saudi Tadawul Group.

Four Middle Eastern nations last month were admitted into the Brics bloc of developing countries – made up of Brazil, Russia, India, China and South Africa – bridging regional political divides and signalling increased Chinese influence around the world.

The decision to add another six members – Saudi Arabia, Iran, the UAE, Egypt, Argentina and Ethiopia – was described as a political victory for China to bolster the “Global South” against perceptions of US domination. 

Saudi Arabia remains one of China’s strongest global trade partners, leading Chinese engagement in the construction sector during the first half of 2023, according to the latest Belt and Road Initiative investment report issued by the Green Finance & Development Center at Fudan University in Shanghai. 

Saudi Tadawul Group reported net profit fell 23.6 percent year on year to SAR 105.2 million ($28.05 million) in the second quarter, down from SAR 137.7 million.

The lower profit was driven by a 15.5 percent annual drop in operating revenue to SAR 252 million, as a result of a fall in trading and post-trade revenues.