DUBAI: Saudi Arabia's Public Investment Fund (PIF), the kingdom's sovereign wealth fund, has indirectly invested in the $747 million initial public offering of mall operator Arabian Centres, sources familiar with the matter said.

PIF has made the investment through institutional funds and will not have a direct stake in Arabian Centres, one of the sources said, although the investment represents strong government support for the IPO, a second source told Reuters.

The IPO of Arabian Centres, majority-owned by Fawaz Alhokair Group, is the first in the kingdom under Rule 144a, which allows the sale of securities primarily to qualified institutional buyers in the United States.

Saudi Arabia's PIF did not immediately comment on the investments and Arabian Centres declined to comment.

In its sale offer, Arabian Centres had said public funds, private funds and discretionary portfolios were the main investors in the IPO, but had not disclosed any names.

Saudi Arabia's $300 billion sovereign wealth fund is already a major player in the kingdom's stock market with stakes in some of the largest telecommunications, energy and banking players.

Riyadh has been encouraging more family-owned companies to list in a bid to deepen its capital markets as part of reforms aimed at reducing its reliance on oil revenue.

Institutional funds which the PIF invests in have also been active players and came to the stock market's rescue last year at the height of foreign selling after the killing of journalist Jamal Khashoggi by Saudi agents in Istanbul.

The Saudi stock market is up 13 percent so far this year, one of the best performing in the Middle East, as it entered global emerging market benchmarks such as the FTSE Russell emerging market index.