ECONOMY

Saudi Arabia's economy grew by 2.8% year on year in the third quarter of 2024, driven by an increase in non-oil activities, according to preliminary government data. 

Non-oil sectors expanded by 4.2%, government activities rose by 3.1%, and the oil sector grew by 0.3%, as reported by the General Authority for Statistics (GASTAT). This follows a contraction in the second quarter, when GDP declined due to an almost 9% drop in oil-related activities.

The flurry of economic activities and interest by the international financial community are expected to boost growth over the long term.

In October, the Public Investment Fund (PIF) concluded the second PIF Asset Management Forum, held alongside the 8th Edition of the Future Investment Initiative (FII8) in Riyadh. The event brought together over 300 top representatives from asset management firms, businesses, governments, and sovereign wealth funds. Discussions centred around the future of Saudi capital markets, the impact of artificial intelligence (AI) and digital transformation on asset management, opportunities in private markets in the Middle East and North Africa (MENA) region, and strategies for emerging asset managers in the Saudi financial sector.

OVERSEAS LISTINGS

Since 2018, assets under management by institutions licensed by the kingdom’s Capital Markets Authority (CMA) have doubled from SAR 400 billion to SAR 800 billion. PIF has collaborated with asset managers to introduce specialised products to the market, including the CSOP Saudi Arabia exchange-traded fund (ETF), which was listed on the Hong Kong Stock Exchange (HKEX) in November 2023 with a size of USD 1 billion. This ETF became the first Saudi Arabia ETF in the Asia-Pacific region and the largest of its kind globally, as well as the biggest IPO on the HKEX last year. In mid-2024, two related ETFs were listed on the Shenzhen and Shanghai Stock Exchanges, achieving a combined launch size of USD 169 million and generating over USD 670 million in turnover on their first day.

Furthermore at FII8, PIF secured several MoUs with international financial firms, including a partnership with Brookfield Asset Management to create the Brookfield Middle East Partners platform. Additional agreements were signed with State Street Saudi Arabia Financial Solutions and Mizuho Financial Group Inc. to develop new investment products, pending necessary regulatory and internal approvals.

These deals build on the PIF’s Asset Managers Gate, launched in 2023, to facilitate collaboration with fund managers. Since its inception, over 90 asset managers have registered, with 36 actively partnering with PIF both domestically and internationally.

INDUSTRIAL CO-OPERATION

On the sidelines of the FII8 forum, Bandar Alkhorayef Saudi’s minister of industry and mineral resources held a series of bilateral meetings with leaders of major global industrial companies and international financial institutions to discuss economic co-operation, particularly in the industrial and mining sectors.

International participants included the chairman of BMW, the CEO of Nestle MENA, the chairman of the Eurasian Development Bank, the chairman of global mining company Vale, the head of private equity at Brookfield Asset Management, the CEO of 3D Systems, the CEO of Boeing International, representatives from Sanofi Pharmaceuticals, and the founder and chairman of SoftBank Group.

The meetings discussed promising opportunities across 12 key industrial sectors targeted for development and localisation under the National Industrial Strategy, including aerospace, automotive, food, vaccines,pharmaceuticals, knowledge transfer, and the latest smart manufacturing solutions for the Saudi industrial sector. The talks also revolved around advanced financial technologies and the expansion plans of some global companies in the kingdom.

Moreover, the meetings highlighted the investment opportunities in Saudi Arabia’s mining sector, covering all stages from exploration to extraction and processing. Talks also reviewed key aspects of the comprehensive mining strategy and the Mining Investment Law, which enhances the competitiveness and stability of the mining investment environment in the country.

DOMESTIC DEALS

While authorities are keen to bring international investors, they are also looking to existing industries to help build a strong supply chain for the Saudi economy.

In October, the minister of energy Prince Abdulaziz bin Salman bin Abdulaziz inaugurated the Energy Localization Forum, which observed the theme "Resilient Energy: Enabling Energy Sector Capability and Sustainability". 

The forum saw the signing of 107 strategic agreements and memorandums of understanding (MoUs) aimed at strengthening Saudi Arabia's global leadership in the energy sector. These agreements involved 117 entities from the public and private sectors, with a total estimated value of SAR 104 billion.

"Our comprehensive strategy focuses on localisation rather than just settling for local content," the minister said. "We are taking an all-inclusive approach to localise the entire supply chain, from raw materials to the final product, with the goal of maximising its local value. Our ambition is to transfer technology and products to the kingdom, encompassing the entire supply chain.'