The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, has signed an agreement to invest $500 million in Hong Kong Chaoshang Group, an investment holding company. The investment includes $100 million in five-year convertible debentures and $400 million in a five-year loan.
Negotiations on the final terms of the investment will be completed within three months, according to a statement from the Hong Kong-listed company. However, the agreement is not yet legally binding.
The PIF funding is expected to boost Chaoshang Group’s liquidity and support increased investments in mining, healthcare, and other sectors. For the fiscal year ending March 31, 2024, Chaoshang Group reported an operating loss of HK$87,563,000 (around $5 million), up from HK$42 million the previous year.
PIF’s other investments in China
In November 2023, PIF was reported to be in discussions about a $250 million investment in the Chinese electric vehicle maker Human Horizons Group. A month later, the wealth fund was also said to have increased its investment to $200 million in a technology venture backed by China’s Alibaba Group.
Saudi equity ETF listed in Hong Kong
Separately, last year saw the listing of a new exchange-traded fund (ETF) tracking Saudi equities in Hong Kong, the first such product in Asia. Additionally, in May 2024, it was revealed that officials in Hong Kong were planning to set up an ETF in partnership with Saudi Arabia’s stock exchange.
Potential Saudi-Hong Kong economic agreements
Hong Kong’s deputy financial secretary, Michael Wong, stated that formal negotiations were underway for an investment promotion and protection agreement with Saudi Arabia. Wong also indicated that Hong Kong was considering establishing an economic and trade office in Riyadh.
In 2023, PIF’s assets under management (AUM) surged to SAR2.8 trillion ($746.4 billion), surpassing the SAR2.7 trillion target set for the year. Moreover, the Saudi Arabian sovereign wealth fund aims to grow its AUM to $2 trillion by 2030.