Ultra-rich families are set to control USD 9.5 tn by 2030

The (ultra) rich get (ultra) richer: The wealth controlled by ultra-rich families is expected to hit USD 9.5 tn by 2030, up 73% from today’s USD 5.5 tn, Bloomberg reports, citing estimates from consultancy Deloitte. Family offices — private investment firms for the wealthy — are growing fast, with their numbers projected to rise by one-third to over 10.7k over the same period.

What’s driving the growth? Wealth inequality is concentrating “more money in the hands of the very rich,” while it is increasingly becoming easier to set up family offices, the outlet reports. More family offices are popping up, and some are rivaling hedge funds in size and talent. These firms are taking on bigger roles in markets with some acting as activist investors.

Uh, Enterprise, what are activist investors? Activist investors are shareholders who use their equity stake to influence a company’s operations, often pushing for changes to increase shareholder value.

Most family offices are small but mighty: The average family office manages some USD 2 bn with just 15 employees, and one-third of these firms are run by someone outside the family, according to the Deloitte report. “It can definitely be risky managing that much wealth,” Rebecca Gooch, global head of insights for Deloitte Private said. “Family offices really need to be careful about who they bring on board,” she added.

ALSO WORTH NOTING FROM PLANET FINANCE- The UAE is emerging as a standout among higher-rated emerging market borrowers as a global risk-off, worries about US growth, and lower US yields push investors to look at safer EM assets in search of returns, Bloomberg suggests. “Investors like the combination of twin surpluses, FX reserve accumulation, lack of political noise and a supportive local bid,” fixed-income portfolio manager at Arqaam Capital, Fady Gendy, told the outlet.

THE CLOSING BELL: TADAWUL-

The TASI fell 0.2% last Thursday on turnover of SAR 7.7 bn. The index is up 1.1% YTD.

In the green: Cenomi Retail (+10%), Sieco (+9.9%) and Al Baha (+7.1%).

In the red: Wataniya (-4.9%), Red Sea (-4.5%) and Astra Industrial (-3.9%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.7% last Thursday on turnover of SAR 40 mn. The index is up 5.1% YTD.

In the green: NGDC (+9.7%), Leen Al Khair (+7.6%) and Paper Home (+7.4%).

In the red: Al Hasoob (-7.7%), Taqat (-4.2%) and Al Wasail Industrial (-4.1%)

CORPORATE ACTIONS-

#1- Cenomi Retail has shelved plans for a capital decrease, but will proceed with the implementation of cost controls and measures to boost performance while continuing to offload non-core brands, it said in a disclosure to Tadawul. Cenomi Retail’s board had recommended a 91.3% capital reduction in March via the cancellation of some 104.8 mn shares as part of a mandated plan to offset accumulated losses that had exceeded more than half of the company’s issued capital by 27 March.

What changed: “A substantial new transaction emerged involving the merger of several commercial agencies on August 19, 2024,” with the move improving the company’s financial position and negating the need for a capital decrease. The company has been working through its franchise sale program and is currently in the second wave of the program, which will see it divest from three brands. Cenomi Retail had exited 16 brands in the previous wave. A third wave is in the offing, with five further brands slated to be sold, CEO Salim Fakhouri said.

#2- Saudi Automotive Services (Sasco) will distribute SAR 17.5 mn in dividends at SAR 0.25 per share in 1H 2024, it said in a filing to Tadawul. Distribution is set for Monday, 30 September.

#3- Bank Albilad will distribute SAR 625 mn in dividends at SAR 0.5 per share for 1H 2024, it said in a disclosure to Tadawul. Distribution is set for Thursday, 3 October.

#4- Saudi Industrial Export Co. (Sadirat) shareholders have approved a stock split, increasing the number of shares to 194.4 mn shares, up from 19.4k shares, by reducing the nominal value to SAR 1 per share from SAR 10 per share, it said in a disclosure (pdf).