Saudi asset management industry passed SR1tn for first time
The Saudi Arabian asset management industry grew by more than 20 per cent in 2024, exceeding SR1tn ($267bn) assets under management (AUM) for the first time, according to Fitch Ratings.
The industry is likely to attract steady inflows in 2025–2026, with AUM set to surpass SR1.3tn ($350bn), due to the growing investor base, favourable demographics, ongoing reforms, deepening capital markets, and digital transformation moves.
However, the market is not immune from global volatilities, such as those caused by the US government's tariff rises on April 2.
Saudi asset management sector
Oil price changes are among the key factors that could affect the industry.
Bashar Al Natoor, Global Head of Islamic Finance at Fitch, said: 'Saudi Arabia's asset management industry is the largest in the GCC, with AUM having crossed SR1tn, and further growth expected.
'Almost all mutual funds listed on the Saudi Exchange are sharia-compliant, indicating strong demand for Islamic products.'
Saudi bank-affiliated asset managers held nearly two thirds of industry revenue. However, international competition is rising. BlackRock, Goldman Sachs, Morgan Stanley, Citigroup, and Mizuho Bank received regulatory approval to set up their regional headquarters in Saudi Arabia in 2024.
The government is aiming for the industry AUM to reach 40 per cent of the GDP by 2030 (2024: 26 per cent).
About half of the industry's AUM were in private funds, followed by discretionary portfolio management (DPM), and public funds.
The private funds' AUM are split mainly between real estate and equities. About half of AUM under DPM are in local shares. Public funds' AUM are split between money market funds, equities, REITs, and debt instruments.
The combined capitalisation of GCC listed equity markets crossed $4tn at end-2024, dominated by the Saudi Exchange.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Fintech News ME
a day ago
- Fintech News ME
Qatar Islamic Bank Partners with Visa to Boost Cross-Border B2B Payments
Qatar Islamic Bank (QIB) has partnered with Visa to enhance cross-border business-to-business (B2B) transactions. The collaboration involves the integration of the Visa B2B Connect platform, which will enable corporate clients to transfer funds from Qatar to 120 countries in a secure and streamlined manner. The platform is designed to support businesses in conducting international transactions more efficiently, aiming to improve the reliability and security of cross-border payments. QIB's adoption of Visa B2B Connect aligns with its broader strategy to strengthen international payment corridors and provide clients with cost-effective and consistent transfer services. Tarek Fawzi, General Manager, Wholesale Banking Group at QIB, said: 'By leveraging cutting-edge technology and digital advancements, we're able to process account-to-account transfers promptly, helping businesses stay competitive and contributing to the broader economic landscape.' QIB is the first Islamic bank in Qatar to adopt the Visa B2B Connect platform, adding to its existing international money transfer services and expanding its digital payment capabilities. Shashank Singh, Visa's Vice President and General Manager for Qatar and Kuwait, said: 'Visa B2B Connect provides seamless, secure and efficient global money movement solutions for financial institutions and their corporate clients. The solution also supports the Qatar government's efforts to drive digital innovation in the financial and business sector.' International money transfers often involve complexities, but this new network aims to improve transparency and predictability. These features may support better financial planning and strategic decision-making for businesses operating across borders.
Arabian Post
2 days ago
- Arabian Post
Saudi Arabia Pushes for Larger OPEC+ Oil Output Increases
Arabian Post Staff -Dubai Saudi Arabia is advocating for accelerated increases in oil production within the OPEC+ coalition, aiming to reclaim market share lost during past output cuts. The kingdom is reportedly pressing the group to raise supplies by more than 400,000 barrels per day for August and possibly September, signalling a clear shift in strategy amid evolving global energy demands. The decision underscores Saudi Arabia's intent to capitalise on high seasonal demand in the northern hemisphere summer months. By scaling back production curbs more aggressively, Riyadh seeks to boost revenue and solidify its influence over global oil markets as supply dynamics shift. This approach reflects broader geopolitical and economic calculations, especially as global economies adjust to fluctuating energy needs and the ongoing transition to cleaner energy sources. ADVERTISEMENT OPEC+ has been managing oil supply carefully since 2020, following the severe demand shock caused by the pandemic and ensuing market volatility. Initial drastic cuts helped stabilise prices, but the alliance has gradually increased output to balance rising demand. Saudi Arabia, as the largest producer within OPEC+, holds substantial sway in determining the group's production policies and has been central to managing these supply adjustments. This move to hasten production hikes also coincides with concerns over emerging market demand and the possible impact of economic slowdowns in key economies such as China and Europe. Saudi officials appear confident that increased output will prevent rivals, including the US shale sector and other non-OPEC producers, from expanding their share amid tightening market conditions. Industry experts highlight that Saudi Arabia's push for faster supply growth may be aimed at pre-empting market share erosion by ensuring that OPEC+ remains the dominant supplier globally. Since mid-2022, the kingdom has carefully recalibrated its production to respond to volatile price trends and geopolitical uncertainties, including tensions in the Middle East and disruptions caused by sanctions on Russia. The timing of the proposed output rise is critical. Summer months traditionally bring peak consumption due to higher energy needs for cooling in developed markets, which can drive up prices. Saudi Arabia's intention to increase supply during this window suggests an effort to maximise returns while stabilising prices to avoid sharp fluctuations that could undermine consumer confidence and economic recovery. Global oil markets remain sensitive to a variety of factors including inflationary pressures, currency fluctuations, and shifting consumer behaviour. While demand for fossil fuels is under pressure from environmental policies and the accelerating transition to renewables, oil remains a crucial commodity in the global energy mix. Saudi Arabia's strategy to secure market share through supply management is thus seen as a pragmatic response to balancing short-term profitability with long-term market relevance. ADVERTISEMENT OPEC+ member countries have historically struggled to reach consensus on output levels, with diverse national interests shaping negotiations. Saudi Arabia's dominant position, reinforced by its vast production capacity and financial reserves, often allows it to influence group decisions. However, some members have expressed concerns about aggressive supply increases potentially undermining prices and fiscal stability. The broader geopolitical landscape also plays a role in shaping OPEC+ policies. Tensions involving key players such as Russia, which holds a significant share in the alliance, and ongoing conflicts in the Middle East add layers of complexity to supply decisions. Riyadh's leadership in pushing for larger hikes indicates confidence in managing these risks while maintaining its strategic goals. Market analysts note that US shale producers have responded to higher prices by increasing output, albeit with some operational constraints. Saudi Arabia's efforts to accelerate OPEC+ production are seen as a counterbalance to this trend, aiming to keep global supply within manageable limits and avoid price spikes that could trigger demand destruction or accelerate the shift to alternatives. Saudi Aramco, the kingdom's state-owned oil giant, plays a pivotal role in implementing the supply strategy. Its vast infrastructure, including refineries and export terminals, supports the planned output increases. Aramco's ability to ramp up production rapidly without incurring excessive costs provides Saudi Arabia with a competitive edge in the global energy market. Environmental considerations also influence production decisions. While the global push for net-zero emissions is intensifying, OPEC+ nations, led by Saudi Arabia, continue to argue for the essential role of oil in energy security and economic development. The kingdom is simultaneously investing in cleaner technologies and diversifying its economy to reduce dependence on hydrocarbons in the long term. The interaction between Saudi Arabia's production policy and global economic indicators remains closely monitored by investors and policymakers alike. Oil prices affect inflation rates, trade balances, and geopolitical stability, making OPEC+ decisions crucial beyond the energy sector. The kingdom's assertive stance on output could signal a more proactive approach to managing these broader economic impacts. Analysts emphasize that while Saudi Arabia seeks to regain market share, the volatility of global markets and uncertainties surrounding demand growth require cautious optimism. Supply increases must be balanced against potential oversupply risks, which could trigger price declines detrimental to all producers within OPEC+.
Khaleej Times
3 days ago
- Khaleej Times
Global markets on tenterhooks as 'new cold war' turns hot
As military spending ramps up around the world and countries rush to ringfence critical industries, political rhetoric appears to have darkened from one sketching geopolitical risks to outright preparation for war. Whether global markets should take more note is a moot point. Investors are already preoccupied with a full-blown trade war, which has aggravated international tensions and is much like the latest ratchet in U.S. steel and aluminium tariffs. But it is not hard to find the 'safety' trades thriving. Gold is less than 2% from a record close set a month ago, having climbed almost 30% so far this year. The Swiss franc , also up almost 10% this year, is pushing higher too. Most obvious of all is the nearly 50% rise in European defence stocks since January. Safety trades that have not barked are just as interesting. The dollar's haven status has been undermined by U.S. trade and tax worries and President Donald Trump's domestic institutional upheavals. And government bonds are pressured precisely because the additional defence spending associated with another generational arms race is exaggerating outsized post-pandemic debt loads even more. Global government debt indexes remain in the red for 2025. "Elevated geopolitical risk affects issuers through multiple transmission mechanisms," credit rating firm Fitch said on Friday, adding it "put upward pressure on defence spending, making fiscal consolidation more challenging for certain sovereigns." War drumbeat But at whatever part of the market risk dial you put world war worries, there is no doubt the temperature has risen. Even in the last few days, the language surrounding future major power conflicts has been alarming. Goading Asian allies to match European moves to boost military spending, U.S. Defence Secretary Pete Hegseth warned on Saturday that Chinese military moves to take Taiwan were "imminent". "There's no reason to sugar coat it. The threat China poses is real, and it could be imminent," Hegseth said, adding that any attempt by China to secure Taiwan militarily "would result in devastating consequences for the Indo-Pacific and the world". Beijing reacted angrily and said Hegseth "vilified China with defamatory allegations". But senior U.S. officials have repeatedly briefed that they believe Chinese President Xi Jinping has ordered his military to be ready to invade Taiwan by 2027, even if they say no direct decision appears to have been made. Back in Europe, the drum beat about the need to lift military spending is even louder, more fearful of a threat from Russia. Nearly a trillion euros ($1.14 trillion) of extra German and European-wide defence spending have been earmarked this year. Only last week, Chancellor Friedrich Merz said Germany and its NATO partners were prepared to defend every inch of the alliance's territory. "Anyone who threatens an ally must know that the entire alliance will jointly defend every inch of NATO territory," Merz said on Thursday at a military ceremony in Vilnius to mark the establishment of a German brigade in Lithuania. Britain's strategic defence review on Monday also addressed threats from Russia, nuclear risks and cyberattacks by outlining investment in drones and digital warfare. But the plan also expands the UK's fleet of attack submarines, which are nuclear-powered but carry conventional weapons, and will spend 15 billion pounds ($20.3 billion) by 2029 on replacement of nuclear warheads for its main nuclear fleet. And again, the rhetoric was alarming. "We are being directly threatened by states with advanced military forces, so we must be ready to fight and win," Prime Minister Keir Starmer. 'NEW COLD WAR' TURNS HOT If securing the funding needs political alarm, then maybe that explains some of the high-octane public relations. But there is no shortage of deeply entrenched conflicts raging across the globe and threatening to spill over to varying degrees. Multilateral solutions seem distant as the globe breaks in the blocs. Even with negotiators exploring a ceasefire in Istanbul, Ukraine's forces made an extraordinary move this weekend to attack strategic bomber aircraft at bases deep inside Russia. Israel's devastation of Gaza in reprisal for the 2023 massacres by Hamas shows no sign of ending. More than 30 more Palestinians were killed and nearly 170 injured on Sunday near a food distribution site. Reports continued to circulate last week that Israel is threatening to disrupt nuclear talks between Washington and Tehran by striking Iran's nuclear facilities. And nuclear-armed India and Pakistan have just stepped back from another tense border conflict that marked the fiercest fighting in decades. The expansion of 'hot' conflicts is a mounting concern in political circles, with extraordinary territorial claims thrown into the mix. Trump's public ambition to take over Panama and Greenland have jarred allies, with the latter being part of rivalry over access to rare minerals and also amid strategic plays for the Arctic. Even J.P. Morgan boss Jamie Dimon gets the drift, reportedly telling Barron's last week the United States should not be stockpiling Bitcoin, but instead be stockpiling "guns, bullets, tanks, planes, drones, you know, rare earths." That the world is a dangerous place is not in doubt. A world at war is a different proposition. A worse case scenario is that tariff wars are just the opening act.
