Hong Kong's economy was "doing okay" in the last quarter, Financial Secretary Paul Chan said, welcoming latest interest rate cuts by banks and their easing the pressure on residents and businesses that have to repay mortgages and loans.

He made the remarks as he wrapped up a four-day tour to Riyadh, where five agreements were signed on Thursday by Hong Kong delegation members and their partners in the Saudi Arabian capital covering artificial intelligence, robotics and digital economy.

Chan said the city's economy, though "doing okay", was "undergoing a transitional period" that pose severe challenges for certain industries as they transform.

He said the government is highly concerned about the SAR's job market, as preliminary figures have shown the latest unemployment rate rose to 3.9 percent, the highest in about three years, with construction, catering and retail sectors coming under the most pressure.

Following the US Federal Reserve's 25 basis-point interest rate cut, the Hong Kong Monetary Authority lowered its base rate by the same margin and key banks reduced their prime lending rates by 12.5 basis points.

Chan cautioned that while the city would largely follow the US interest rate path, the scope for rate reductions in the SAR might differ as it also depends on the size of the city's own capital pool.

The comments came just before Hong Kong is set to release its latest quarterly economic data on Friday.

Chan also said the city is "accelerating" its efforts to set up an Economic and Trade Office in Riyadh and that the first Middle Eastern company is expected to list in the SAR in the coming months, which will mark a "breakthrough" in terms of bilateral ties.

Chan said Middle Eastern firms had shown "significant interest" in going public in Hong Kong and that the city is also planning to issue Islamic bonds to fund the Northern Metropolis mega infrastructure project, as long as they are a cost-effective option.

Islamic bonds, commonly known as sukuk, refer to bonds whose terms and structures comply with Sharia, the body of Islamic law.

Chan said the city's legal and regulatory framework for issuing sukuk are already mature and that it was ready to proceed with such issuances anytime – with support from the market.

Five memoranda of understanding (MoUs) were signed by companies and organisations from the city and the mainland with their partners in Riyadh.

Among them was robotics firm Beijing Yunji Technology, smart sensing firm Maphive Technology and AI firm Shenzhen RabbiPre Intelligence Technology.

A MoU was also signed between the Trade Development Council and the Digital Cooperation Organisation, a multilateral body that focuses on the digital economy, to use Hong Kong as a platform for its members to access Asia-Pacific markets.

Chan also promoted the SAR's world-class capabilities in urban planning, architectural design, engineering consultancy and construction tech during his visit, noting there's "significant potential" for collaboration as such strengths suit the kingdom’s "Vision 2030" plan.