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Jeddah - Yasmine El Tohamy - ADX and HSBC collaborate on digital fixed-income securities for Middle East capital markets
RIYADH: Abu Dhabi Securities Exchange and HSBC Bank Middle East Limited have partnered to introduce digital fixed-income securities to the region’s capital markets.
This initiative capitalizes on ADX’s expertise in investment products as the fastest-growing exchange in the Middle East, according to a press release.
It also underscores HSBC’s capabilities in investment banking, capital markets, and blockchain technology.
Digital bonds are financial instruments managed using blockchain and smart contract technology to streamline operations in capital markets.
CEO of ADX, Abdulla Salem Al-Nuaimi, expressed his enthusiasm, saying: “We are thrilled to partner with HSBC, one of the world’s leading banks, to create a digital fixed-income product. We firmly believe that digital assets will gain increasing importance in the future, and ADX aims to be at the forefront of this innovation.”
He added: “This project underscores our commitment to ADX’s digital transformation journey and complements our ongoing efforts to provide innovative products to our expanding investor base. ADX and HSBC will jointly explore a framework that enables digital assets, such as digital bonds, to be accessible through HSBC Orion, the bank’s digital assets platform, and to be listed on ADX.”
CEO of HSBC UAE, Mohammed Al-Marzouqi, said: “HSBC is embracing digital transformation on a large scale by adopting technologies like blockchain to facilitate the issuance, custody, and trading of digital assets.”
He added: “This capability promises to enhance efficiency and create new, innovative opportunities for investors. HSBC and ADX are working together to leverage HSBC Orion, our proprietary digital assets platform, and our combined expertise in capital markets and custody to bring this exciting development to the market.”
By utilizing blockchain technology, a broader range of assets, including equities, fixed income, real estate, and private equity, can be tokenized, democratizing asset ownership and making securities markets more accessible to a broader range of investors.
ADX is the second largest market in the Arab region, and its strategy of providing stable financial performance with diversified sources of income aligns with the guiding principles of the UAE’s “Towards the next 50” agenda.
HSBC is the largest and most widely represented international banking organization in the Middle East, North Africa and Türkiye, with a presence in nine regional countries.
The institution is a 31 percent shareholder of Saudi British Bank and a 51 percent shareholder of HSBC Saudi Arabia for investment banking in the Kingdom. Across MENAT, HSBC had assets of $71bn as of Dec. 31, 2022.
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