Saudi Wealth Fund’s Returns Boosted by Global Markets Rally - Bloomberg
Saudi Arabia’s sovereign wealth fund said returns rose last year driven by local investments and gains on its international portfolio.
The Public Investment Fund’s annualized returns since 2017 rose to 8.7%, compared with 8% a year earlier, according to an annual report published Monday. Performance was boosted by last year’s rally in global markets, with the S&P 500 Index returning 24% in 2023.
Assets under management at the fund grew to $760 billion at the end of last year, helped by the kingdom’s move to transfer a 4% stake — worth over $70 billion — in Saudi Aramco to one of the PIF’s subsidiaries in 2023.
International assets made up a fifth of total holdings, or 586 billion riyals at the end of 2023. That was up by more than 14% from a year earlier, which the PIF said was “well ahead” of target — though those holdings accounted for 23% of total assets a year earlier. The portion of the fund’s externally-managed assets fell to 15% from 17%.
The fund, chaired by Crown Prince Mohammed bin Salman, is a key vehicle for his efforts to reshape the Saudi economy and wean it off a reliance on oil sales.
Earlier this year, the kingdom transferred another 8% stake in Aramco to the PIF, helping it get closer to a target of managing more than $1 trillion of assets by 2025.
The fund swung to a profit last year, according to accounts published in July. It made $25 billion from investment activities, compared to a loss of $11 billion a year earlier.
Monday 19 August 2024
Gulf bourses end mixed on US rate-cut hopes, weak oil demand | Reuters
Gulf bourses end mixed on US rate-cut hopes, weak oil demand | Reuters
Stock markets in the Gulf ended mixed on Monday on rising expectations of a U.S. interest rate cut next month, and amid weak oil demand.
Federal Reserve members Mary Daly and Austan Goolsbee, in interviews on Sunday, flagged the possibility of easing in September, while minutes of the last policy meeting due this week should underline the dovish outlook.
Fed Chair Jerome Powell speaks in Jackson Hole on Friday and investors assume he will acknowledge the case for a cut.
Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by the Fed's decisions, as most regional currencies are pegged to the U.S. dollar.
Saudi Arabia's benchmark index (.TASI), opens new tab gained 0.4%, with Al Rajhi Bank (1120.SE), opens new tab rising 1.2% and Middle East Pharmaceutical Industries (4016.SE), opens new tab closing 2.2% higher.
Separately, Saudi Arabian perfumer Al Majed For Oud plans to float a 30% stake on the local bourse, the company said on Monday, adding to a growing number of firms in the Gulf opting for a public listing.
The Qatari index (.QSI), opens new tab finished 0.2% higher, led by a 2.8% rise in telecoms firm Ooredoo (ORDS.QA), opens new tab.
In Abu Dhabi, the index (.FTFADGI), opens new tab was up 0.2%.
Dubai's main share index (.DFMGI), opens new tab eased 0.1%, hit by a 1% fall in top lender Emirates NBD (ENBD.DU), opens new tab.
Oil prices - a catalyst for the Gulf's financial markets - eased, with Brent holding below $80 as concern over demand in top oil importer China weighed on market sentiment.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab dropped 0.5%, weighed down by a 0.9% fall in Commercial International Bank (COMI.CA), opens new tab.
Stock markets in the Gulf ended mixed on Monday on rising expectations of a U.S. interest rate cut next month, and amid weak oil demand.
Federal Reserve members Mary Daly and Austan Goolsbee, in interviews on Sunday, flagged the possibility of easing in September, while minutes of the last policy meeting due this week should underline the dovish outlook.
Fed Chair Jerome Powell speaks in Jackson Hole on Friday and investors assume he will acknowledge the case for a cut.
Monetary policy in the six-member Gulf Cooperation Council (GCC) is usually guided by the Fed's decisions, as most regional currencies are pegged to the U.S. dollar.
Saudi Arabia's benchmark index (.TASI), opens new tab gained 0.4%, with Al Rajhi Bank (1120.SE), opens new tab rising 1.2% and Middle East Pharmaceutical Industries (4016.SE), opens new tab closing 2.2% higher.
Separately, Saudi Arabian perfumer Al Majed For Oud plans to float a 30% stake on the local bourse, the company said on Monday, adding to a growing number of firms in the Gulf opting for a public listing.
The Qatari index (.QSI), opens new tab finished 0.2% higher, led by a 2.8% rise in telecoms firm Ooredoo (ORDS.QA), opens new tab.
In Abu Dhabi, the index (.FTFADGI), opens new tab was up 0.2%.
Dubai's main share index (.DFMGI), opens new tab eased 0.1%, hit by a 1% fall in top lender Emirates NBD (ENBD.DU), opens new tab.
Oil prices - a catalyst for the Gulf's financial markets - eased, with Brent holding below $80 as concern over demand in top oil importer China weighed on market sentiment.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab dropped 0.5%, weighed down by a 0.9% fall in Commercial International Bank (COMI.CA), opens new tab.
Can #SaudiArabia break free from using oil for power generation? | The National
Can Saudi Arabia break free from using oil for power generation? | The National
If Saudi Arabia’s electricity sector were a country, it would match the entire oil consumption of Italy, Spain or Turkey. Despite also consuming prodigious quantities of natural gas, the kingdom uses nearly 1.4 million barrels per day in summer to generate power and water. But Riyadh may be about to turn the corner.
Like its GCC neighbours, Saudi Arabia needs large volumes of fuel for desalination and air-conditioning. It is on a bigger scale, though, and with the exception of Kuwait, its other Gulf colleagues use gas almost exclusively instead of oil. Fuel is supplied to the power sector at very low prices: until recently, less than $7 per barrel of crude oil.
After subsidy reductions in 2016 and 2018, electricity demand flattened out. But the attempts to diversify the economy, boost industry and tourism, and construct new cities, have seen power consumption resume its strong upward growth from 2021 onwards. An increasingly hot climate and new sectors such as data centres will push up future electricity needs: peak demand was up 9.5 per cent in the first half of this year.
This heavy use of oil is problematic in various ways. Not because Saudi Arabia cannot afford it – it can. Oil production costs are low, and reserves huge, probably more than will realistically be produced well into the second half of this century. This is not, as some naive analyses suggest, oil that would otherwise immediately be exported to the world market at $80 per barrel.
If Saudi Arabia’s electricity sector were a country, it would match the entire oil consumption of Italy, Spain or Turkey. Despite also consuming prodigious quantities of natural gas, the kingdom uses nearly 1.4 million barrels per day in summer to generate power and water. But Riyadh may be about to turn the corner.
Like its GCC neighbours, Saudi Arabia needs large volumes of fuel for desalination and air-conditioning. It is on a bigger scale, though, and with the exception of Kuwait, its other Gulf colleagues use gas almost exclusively instead of oil. Fuel is supplied to the power sector at very low prices: until recently, less than $7 per barrel of crude oil.
After subsidy reductions in 2016 and 2018, electricity demand flattened out. But the attempts to diversify the economy, boost industry and tourism, and construct new cities, have seen power consumption resume its strong upward growth from 2021 onwards. An increasingly hot climate and new sectors such as data centres will push up future electricity needs: peak demand was up 9.5 per cent in the first half of this year.
This heavy use of oil is problematic in various ways. Not because Saudi Arabia cannot afford it – it can. Oil production costs are low, and reserves huge, probably more than will realistically be produced well into the second half of this century. This is not, as some naive analyses suggest, oil that would otherwise immediately be exported to the world market at $80 per barrel.
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