Bloomberg: Saudi “public investments” are about to penetrate the Chinese stock market

The Fund for Public Investments has applied for a license as a qualified foreign institutional investor in China, which makes it in about to start making significant investments in Chinese companies, having so far confined most of its foreign holdings to the United States e in Europe.

Bloomberg reported that the $ 450 billion fund has applied for a qualifying foreign institutional investor license in China, according to information posted on the site web of China’s largest securities regulator, which will give them the ability to trade denominated shares in yuan directly, rather than directly. Having to go through third parties.

China is Saudi Arabia’s largest trading partner. He is also the largest client of Saudi Aramco, whose board of directors is chaired by the governor of the public investment fund, Yasser Al-Rumayyan.

This comes as many global investors prepare for greater exposure to stocks in difficulty in China, amid bets that regulatory reform in Beijing has peaked.

The second largest economy in the world has also been an attractive destination for sovereign investors, with the Russian wealth fund diverting billions of dollars. in yuan as part of an effort to make the country less vulnerable to sanctions.

The two trillion dollar target

The Public Investment Fund, which did not disclose any investments in China, aspires to reach the size of its assets at two trillion dollars, e in in this context, the fund’s assets increased by approximately $ 20 billion, according to the latest data, to rise to eighth place among the world’s largest sovereign funds.

The fund’s first major international deal was in 2016, with an investment of $ 3.5 billion in Uber Technologies and, more recently, the fund backed Lucid Motors prior to its IPO through a deal with a special purpose acquisition.

And last March, with the collapse of global markets due to the emergence of the Corona virus pandemic, the Public Investment Fund secured a transfer of $ 40 billion from the Kingdom’s reserves to take advantage of the recovery in inventories.

It revealed holdings worth $ 10.1 billion in U.S.-listed companies, including The Walt Disney Company, BP and Boeing, at the end of June last year, only to sell most of them three months later as markets rise.

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