A new exchange-traded fund (ETF) tracking Saudi equities made its trading debut in Hong Kong on Wednesday, becoming the first product of its kind in Asia amid warming bilateral relations between China and Saudi Arabia.

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The ETF, called CSOP Saudi Arabia ETF (2830.HK), is managed by Hong Kong-based CSOP Asset Management. It counts Saudi sovereign wealth fund, Public Investment Fund (PIF), as an anchor investor, CSOP said in a press release.

The index was up about 0.9 per cent in opening trade.

"Today is a milestone in our financial cooperation with Saudi Arabia," said Hong Kong Financial Secretary Paul Chan at a launch event.

"It makes it possible for mass investors in our part of the world to invest and participate in the development of the Saudi Arabia's economy," he said. "We can expect to see more products to be made available in both the Hong Kong and the Saudi markets for our respective investor bases."

The fund tracks the performance of the FTSE Saudi Arabia Index, whose 56 constituents' total market value reached $276.8 billion at the end of October, an index document showed.

Through the ETF, investors in Hong Kong will be able to trade Saudi stocks including the oil giant Saudi Aramco (2222.SE) and the Saudi National Bank (1180.SE) in Hong Kong dollars or Chinese yuan.

"The fund will offer a unique opportunity to investors to gain exposure to our fast-growing economy," said PIF Deputy Governor Yazeed A. Al-Humied at the launch event

"Our aim is to continue to attract foreign investors into the Saudi capital markets... To show our commitment, PIF would act as the lead investor of this fund."

Reuters reported in August that the Hong Kong Stock Exchange (0388.HK) and a mainland bourse were in separate talks with the Saudi stock exchange for pacts that would allow investors on both sides to trade equities and bonds in each other's markets.

The ETF launch comes as China's government, frustrated by what it sees as the U.S. weaponisation of economic policies, has sought to expand ties with countries in Europe, the Middle East and Africa.

That diplomatic push includes courting U.S. ally Saudi Arabia.

While economic cooperation between Beijing and Riyadh remain anchored on energy interests, ties in trade, investment and security have been expanding. China is Saudi Arabia's top trading partner with trade worth $87.3 billion in 2021.

The People's Bank of China and the Saudi Central Bank this month signed a local currency swap agreement worth 50 billion yuan ($6.93 billion) or 26 billion Saudi riyals, to strengthen financial cooperation, and promote trade and investment.