Sign in
Saudi Arabia’s assets under management (AUM) grew 13.5% y-o-y to top USD 250 bn in 1H 2024, according to Fitch Ratings. The agency sees the Kingdom’s asset management industry expanding into the second half of 2024 and next year supported by regulatory reforms, a booming capital market and heightened demand for Saudi’s asset management services from high-net-worth individuals.
(** Tap or click the headline above to read this story with all of the links to our background and outside sources.)
And the outlook is positive: “Saudi AUM could cross USD 300 bn within a couple of years, driven by Vision 2030’s Financial Sector Development Program,” Global Head of Islamic Finance at Fitch Ratings Bashar Al Natoor said. Demand for islamic funds is solid, with nearly 95% of mutual funds in the Kingdom being shariah-compliant, Al Natoor added.
Market breakdown: AUM accounted for 22% of GDP last year, with private funds holding three times more assets than public funds, according to Al Natoor. AUM by private funds are concentrated in equities (43%) and real estate (40.5%), while public funds favor money markets (28%) ahead of equities (25.6%), with REITs and debt trailing at 18.7% and 16%.
FOR REFERENCE- Saudi is home to the largest AMI in the GCC and the second-largest market for public Islamic finds globally, while Tadawul is the largest stock exchange in the Gulf and the world’s tenth largest.
Logging strong returns: Capital market institutions booked USD 1.1 bn in net income in 1H 2024, up 29% y-o-y. Return on equity hit 15% in 2023, while the industry’s capital adequacy ratio stood at 28.1% at the end of 1H 2024, comfortably above the 8% minimum requirement. Nevertheless, fluctuations in oil prices and interest rates present risks to Saudi’s asset management industry, Fitch Ratings said.
