Public Investment Fund Commits $500 Million to Hong Kong Chaoshang Group
Riyadh, October 2023 – The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, has signed an agreement to invest $500 million in the Hong Kong Chaoshang Group, an investment holding company. The deal comprises $100 million in five-year convertible debentures and a $400 million five-year loan.
The final terms of the investment are set to be concluded within the next three months, per a statement from the Hong Kong-listed company. However, the agreement has not yet reached legally binding status.
This significant PIF investment is anticipated to enhance Chaoshang Group’s liquidity and support increased investments across various sectors, including mining and healthcare. For the fiscal year ending March 31, 2024, Chaoshang Group reported an operating loss of HK$87,563,000 (approximately $5 million), a rise from HK$42 million in the previous year.
PIF’s Expanding Portfolio in China
In November 2023, PIF reportedly engaged in discussions regarding a $250 million investment in the Chinese electric vehicle manufacturer Human Horizons Group. Following this, the wealth fund increased its investment to $200 million in a technology venture supported by China’s Alibaba Group.
Saudi Equity Developments in Hong Kong
In a notable move last year, a new exchange-traded fund (ETF) tracking Saudi equities was listed in Hong Kong, the first product of its kind in Asia. Further developments in May 2024 revealed that officials from Hong Kong plan to establish an ETF in partnership with Saudi Arabia’s stock exchange.
Prospective Saudi-Hong Kong Economic Agreements
Michael Wong, Hong Kong’s Deputy Financial Secretary, disclosed that negotiations are underway for an investment promotion and protection agreement with Saudi Arabia. Additionally, Hong Kong is contemplating setting up 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 for the year. The Saudi Arabian sovereign wealth fund aims to boost its AUM to $2 trillion by 2030.
For further details on banking and finance, visit Economy Middle East.
Source: Economy Middle East
