Agricultural Bank to receive Qatar and Kuwait investments

Middle East countries pledge $3.6bln investment in AgBank while Qatar Holding expands portfolio in China.

Investments from Qatar and Kuwait totaling US$3.6 billion in a massive Chinese share offering are the latest sign of the financial and economic ties between China and the Middle East.

Sovereign-wealth fund Qatar Investment Authority is investing US$2.8 billion in the Hong Kong portion of Agricultural Bank of China Ltd.'s IPO, two people familiar with the deal said. In addition, one of the people said Kuwait Investment Authority will invest $800 million in the offering, which is aimed at raising a total of US$20 billion to US$30 billion on the Hong Kong and Shanghai stock exchanges.

Also Monday, Qatar Holding, Qatar Investment Authority's investment arm, said it signed a memorandum of understanding for strategic cooperation with AgBank to expand its portfolio in China.

The agreement will allow Qatar Holding "to further develop its portfolio in China, as well as allowing Agricultural Bank of China to build a leading presence in the Middle East," Qatar Holding said in an emailed statement, without giving further details about the agreement.

The Qatar and Kuwait funds' investments make them the two biggest cornerstone investors in AgBank's IPO, underscoring the close ties that China has built with the Gulf states in recent years. Since the credit crisis, these relationships have become even more of a priority.

View the full story in the Wall Street Journal.