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Zawya
16-04-2025
- Business
- Zawya
Saudi Arabian asset management industry exceeds SAR 1trln
Fitch Ratings-Toronto/Dubai/Jakarta: The Saudi Arabian asset management industry grew by over 20% in 2024, exceeding SAR1 trillion (USD266 billion) assets under management (AUM) for the first time, Fitch Ratings says. The industry is likely to attract steady inflows in 2025–2026, with AUM set to surpass SAR1.3 trillion (USD350 billion), 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 2 April. Oil price changes are amongst the key factors that could affect the industry. 'Saudi Arabia's asset management industry is the largest in the GCC, with AUM having crossed SAR1 trillion, and further growth expected', said Bashar Al Natoor, Global Head of Islamic Finance at Fitch. '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% of the GDP by 2030 (2024: 26%). 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 USD4 trillion at end-2024, dominated by the Saudi Exchange. Foreign investor ownership in Saudi stocks reached 10.8% in 9M24 (2023: 12.8%). About 63% of the Saudi debt capital market is in sukuk, with almost all Fitch-rated Saudi sukuk being investment-grade. -Ends- Media relations Matt Pearson Associate Director, Corporate Communications Fitch Group, 30 North Colonnade, London, E14 5GN E:
Zawya
06-02-2025
- Business
- Zawya
UAE DCM to thrive in 2025 on funding diversification; Major emerging markets issuer
Dubai / Jakarta / Toronto: Fitch Ratings anticipates a vibrant UAE debt capital market (DCM) in 2025, and for it to grow to USD400 billion over the next few years. This growth will be propelled by funding diversification, upcoming debt maturities, infrastructure financing, regulatory reforms, and the Dirham Monetary Framework (DMF) implantation. A favourable funding environment, with projected lower US Federal Reserve interest rates in 2025, and declining oil prices could further stimulate the diverse DCM. Nasdaq Dubai continues to be a key global listing venue for sukuk. "After surpassing USD300 billion and up just over 10% from last year, the UAE DCM is on track to reach USD400 billion, driven by strategic diversification and reforms," said Bashar Al Natoor, Global Head of Islamic Finance at Fitch Ratings. "The UAE continues to be a key part of the global sukuk landscape, with 92% of its sukuk being investment-grade, nearly all of its sukuk issuers on Stable Outlooks. No defaults in 2024 highlight the market stability, supported by the evolving Dirham Monetary Framework and favourable funding conditions." The UAE was the third-largest dollar debt issuer in emerging markets (excluding China) and second-largest DCM among GCC countries in 2024. It is among the most developed DCMs within the Organisation of Islamic Cooperation (OIC) countries, and is a significant global sukuk issuer and investor. Sukuk made up 20.8% of dollar issuances in 2024, followed by ESG issuance (17.2%). The dirham's share of the DCM rose to 23% by end-2024 (2020: 0.5%). The UAE's consolidated debt is stable. We expect UAE banks to continue being key debt issuers and investors. However, challenges persist. The DCM investor base is concentrated in banks. Dirham issuance by corporates and banks are rare. Many large corporates are starting to issue debt, but the funding culture remains bank-focused. Sharia complexities, including AAOIFI Standard 62, pose risks for sukuk. Matt Pearson Senior Associate, Corporate Communications Fitch Group, 30 North Colonnade, London, E14 5GN E:
