FII 2024: Hong Kong, Saudi Arabia to anchor US$1 billion investment fund

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In addition, Hong Kong and Saudi market regulators announce a partnership to spur cross-border listings and training

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The deputy CEO of the Hong Kong Monetary Authority Darryl Chan (front left) and the head of the local real estate investments division of Saudi Arabia’s Public Investment Fund Aiman Almudaifer (front right), sign an agreement for a new investment fund in the presence of the Paul Chan, Hong Kong’s financial secretary (back left), and the governor of the PIF, H.E. Yasir Alrumayyan (back right). Photo: Handout

Enoch YiuandSalina Li

Published: 8:07pm, 31 Oct 2024Updated: 9:37pm, 31 Oct 2024

Saudi Arabia’s sovereign-wealth fund the Public Investment Fund and the Hong Kong Monetary Authority (HKMA) signed an agreement in Riyadh on Thursday to work towards jointly anchoring a new investment fund with a target size of US$1 billion, the HKMA said in a statement.

“The fund would explore investment in manufacturing, renewables, fintech and healthcare, supporting the localisation in Saudi Arabia of companies connected to Hong Kong and the Greater Bay Area,” the statement said. “It would enable the creation of highly skilled local jobs and drive economic growth through fostering regional champions in the target sectors.”

The new fund would promote foreign direct investment via Hong Kong, the HKMA said, adding that it will provide a platform for companies to internationalise their businesses and have access to attractive investment opportunities in Saudi Arabia.

The agreement was signed at the annual Future Investment Initiative (FII) summit, where it became the biggest bilateral deal, topping a US$300 million fund announced on Tuesday between Hong Kong Science and Technology Parks (HKSTP) and Saudi Arabia’s start-up incubator Beta Lab.

In addition, Hong Kong and Saudi Arabia’s financial market regulators are looking to cooperate to spur cross-border listing of stocks, exchange-traded funds (ETFs), bonds and other financial instruments, as officials aim to build stronger connections.

The Securities and Futures Commission (SFC) and Saudi’s Capital Market Authority (CMA) will sign an agreement to formalise their future collaborations, CEO Julia Leung Fung-yee said at a media briefing in Riyadh on Thursday. Both regulators could also implement staff secondment for training, she added.

“The SFC and the CMA agreed to be strategic partners to promote cross-border listings and trading of a wide range of financial products of the two markets,” she said. Regular meetings in Hong Kong or Riyadh can be arranged to pursue those goals, as suggested by CMA chairman Mohammed bin Abdullah Elkuwaiz, Leung added.