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Hong Kong and Saudi Arabia are considering to allow more cross-border financial products, following the launch of an exchange-traded fund tracking bonds issued by the Saudi government, as the two markets seek to deepen financial ties amid rising trade uncertainties.

The Premia BOCHK Saudi Arabia Government Sukuk ETF, the first fixed-income fund listed in the territory to offer such exposure, started trading in Hong Kong on Thursday.

Apart from the fund, more products – such as a Sharia-compliant Sukuk bond and a real estate investment trust – are "in the pipeline" for approval to trade between Hong Kong and Riyadh, said Julia Leung Fung-yee, chief executive of the Securities and Futures Commission.

"We're very comfortable in the cross-listing of whatever products," Leung told those attending the Capital Markets Forum organized by Saudi exchange operator Tadawul Group.

Currently, two ETFs tracking Hong Kong stocks are listed in Saudi Arabia, with substantial trading volumes and growth in assets under management, Leung said, adding that she believes capital is flowing bidirectionally between the Middle East and China through Hong Kong and hopes that the corridor connecting the three places can be replicated in other Gulf countries.

HK, Saudi Arabia eye expanding capital flow following Sukuk ETF debut