GCC sovereign wealth funds accounted for 40% of global sovereign investments in 9M 2024

Sovereign wealth funds (SWFs) in the GCC invested USD 55 bn across 126 transactions in 9M 2024, accounting for around 40% of all investments from state-backed investors, consultancy firm Global SWF said in its 2024 GCC playbook report. The lion’s share of investments from the GCC’s sovereign wealth funds — some USD 52 bn — were deployed during the first half of the year, Bloomberg reported previously. In 1H 2024, GCC SWFs accounted for 56% of all the capital deployed by global SWFs.

Leading the pack: The Public Investment Fund (PIF), the Abu Dhabi Investment Authority (ADIA), ADQ, Mubadala, and the Qatar Investment Authority, which are collectively known as the Oil Five.

AUM is heading towards the USD 5 tn mark: Sovereign wealth funds and other sovereign investors in the gulf — including Saudi’s General Organization for Social Ins. and Aramco PF, as well as the Investment Corporation of Dubai — have some USD 4.9 tn in collective assets under management (AUM), the report says. That figure is expected to grow to USD 5 tn early next year and hit USD 7.3 tn by 2030. Although the forecast for the end of the decade is “a shade lower than the USD 7.6 tn the consultancy forecast in its December report, it still represents a 49% increase from 2024,” Bloomberg notes.

The breakdown: Sovereign wealth funds in the UAE have the largest share of AUM within the GCC, with the report forecasting USD 2.2 tn of AUM by the end of 2024, according to Zawya. In Saudi, some USD 1.1 tn are held by the country’s sovereign investors, the report shows. The PIF’s AUM reached USD 900 bn (SAR 3.47 tn) by the end of August, a 21% increase from SAR 2.87 tn at the end of 2023, making the fund the world’s sixth-largest sovereign wealth fund, according to the Finance Ministry’s FY2025 Pre-Budget Statement (pdf).

Where’s the money going? China appears to be emerging as the darling destination for GCC SWF capital, drawing in USD 9.5 bn in investments from the region, the report says. The increased focus on China comes as Western investors have been withdrawing from Chinese investments amid increased pressure and regulatory restrictions. In 2023, sovereign wealth funds from the Middle East had invested USD 2.3 bn in Chinese companies, marking a 2.2k% y-o-y increase from the year prior. the Hong Kong Monetary Authority previously said. Meanwhile, traditional investment destinations the US and UK still attracted a “significant” portion of investments from GCC SWFs.

The tides are changing: “Sovereign investors such as ADIA have traditionally invested over 50% of their portfolio in the US just because there were more opportunities on the rise. However, they have been trying for years to diversify into the East,” Zawya quotes Global SWF founder and Managing Director Diego Lopez as saying. “We have seen increased activity in both China and India.”

REMEMBER- The EU and US hiked tariffs on Chinese imports in recent years in a bid to contain the country’s rise in sectors that much of the developed world sees as a threat to their own economies.

MARKETS THIS MORNING-

It’s a mixed picture in the markets, with Japan’s Nikkei down in early trading, while the Hang Seng is trading in the green. Mainland Chinese markets are closed for the entire week.

Meanwhile, Wall Street futures are just barely in the green, although Dow futures are down 0.1% in pre-market trading.

THE CLOSING BELL-

The DFM fell 0.6% yesterday on turnover of AED 296.46 mn. The index is up 10.3% YTD.

In the green: Dubai Refreshment Company (+15%), National International Holding Company (+15%) and Emirates REIT (+9.5%).

In the red: Amanat (-3.4%), Watania International Holding (-3.0%) and ENBD REIT (-2.1%).

Over on the ADX, the index fell 0.2% on turnover of AED 1.74 bn. Meanwhile Nasdaq Dubai closed down 0.2%.

CORPORATE ACTIONS-

Abu Dhabi’s Al Yah Satellite Communications (Yahsat) approved a payout of AED 204.9 mn in interim dividends for 1H 2024, according to an ADX disclosure (pdf).

Fertiglobe will be paying its shareholders USD 150 mn (AED 551 mn) in interim dividends for 1H 2024, it said in an ADX disclosure (pdf).

Abu Dhabi National Hotels is tapping BHM Capital as price stabilization manager for the shares of its subsidiary, ADNH Catering, according to an ADX disclosure (pdf). The catering unit is set to debut with a 40% stake on the ADX on 23 October after the book building process wraps on 15 October.