YOUR DAVOS 2025 PRIMER- Saudi ministers made the rounds at the World Economic Forum in Davos, discussing in dialogue sessions and other interviews everything from investment targets, the performance of the Saudi capital market, and trade and tourism figures. Here’s everything you need to know:

BANKING AND INVESTMENT-

The Kingdom achieved a USD 200 investment return for every budgeted USD 1, doubling its initial target of a USD 100 return, the Saudi Gazette reports citing remarks by Finance Minister Mohammed Al Jadaan during a dialogue session at Davos yesterday,

Saudi is banking on the private sector: Despite the importance of government intervention at the outset, fast and efficient growth in meeting the diversification agenda is best achieved by giving the private sector space to “grow,” while the government provides guidance and regulation, Economy Minister Faisal Al Ibrahim said (watch, runtime: 5:10). Increased private sector participation unlocks access to smarter (and more) capital, efficiencies, wider community engagement, and innovative solutions, Al Ibrahim said.

Our capital market is going strong: Saudi Arabia averages 40-50 IPOs annually on Tadawul and has over 100 companies listed on Nomu, the fastest-growing market in the region, Minister of Investment Khalid Al-Falih told Bloomberg in Davos (watch, runtime: 24:22). Saudi’s VC sector also leads in the Middle East, accounting for almost 50% of regional VC. The Aramco listing boosted the capital market to the top 10 globally, with foreign ownership reaching USD 100 bn, 25 times higher than five years ago.

BUT- The debt capital market could use a boost: While investments in the base economy are strong, Al-Falih notes, Saudi Arabia’s debt capital market, at less than 4% of GDP, lags behind the G20 average of 40%. There’s potential to grow it significantly, boosting GDP and private sector involvement via bond issuances on Tadawul.

Our friend EFG Hermes Head of Research Ahmed Shams El Din also told us last year that the “dark horse in Saudi Arabia is debt capital markets,” which are still lagging behind most emerging markets. Whereas the average emerging market has DCM issuances at around 25% of GDP, Saudi’s stands at 3% of GDP, Shams El Din noted. A lacking debt capital market will make “the hype” on equity capital markets “not sustainable,” he told us.

Feedback from Franklin Templeton: Franklin Templeton President and CEO Jenny Johnson praised Saudi’s streamlined regulations and a favorable investment environment, emphasizing that “capital goes where capital is treated well.” She noted concerns over hiring a team and Board before final RHQ approval, but commended Saudi regulators for being open, responsive, and eager to engage with investors. Franklin Templeton has since launched its regional headquarters in Riyadh and introduced the Saudi Franklin Bond Fund.

TRADE-

The Kingdom hit SAR 540 bn in services trade in 2023, up 7% y-o-y, Commerce Minister Majid bin Abdullah Al Qasabi said, according to state news agency SPA. Saudi Arabia has been doubling down on improving its services sector, allocating SAR 93.7 bn on developing digital infrastructure while earmarking another SAR 75 bn for future investments, the official said.

TOURISM-

Saudi tourism needs to spread out: Tourism Minister Ahmed Al Khateeb stressed the need for balanced regional tourism growth to prevent over-crowding by tourists at specific cities, Aleqtisadiah.

By the numbers: The tourism sector accounted for 5% of GDP at the end of last year, and is targeting 10% by 2030, backed by USD 500 bn in sustainable tourism projects such as AlUla and the Red Sea, Al Khateeb said. Long-term plans see the Kingdom spending next to USD 1 tn to develop the sector over the next decade.

Saudi tourist numbers hit records last year: The Kingdom welcomed 30 mn foreign tourists in 2024 — up from the previous year’s 27.5 mn — driven by heavy investments in hotels, luxury developments and entertainment, Al Khateeb said, according to Bloomberg. Although still on the rise, the growth in Saudi’s tourist numbers did slow down last year when compared to the 60% jump noted in 2023. The Kingdom hopes to reach 70 mn tourists a year by 2030 as it wagers on middle-class travellers from China and India to boost the tally, Bloomberg added.

AI-

Saudi Aramco inked an agreement with AI innovation startup and Alphabet spin-off SandboxAQ to apply AI towards generating “marketable products” out of cheap fuels and CO2 emissions, Bloomberg reports. The partnership will create new revenue streams for the state-owned oil giant while also curbing emissions, SandboxAQ CEO Jack Hidary said at Davos. Hidary did not supply further details on the investment ticket or other key terms of the agreement.

REMEMBER- Aramco ♥️ AI: Aramco-backed VC fund Wa’ed Ventures earmarked USD 100mn for investments in AI startups last October, while also appointing an advisory board of ex-Meta and Amazon employees to weigh in on early-stage investments in the sector.

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