RIYADH: SHARIF M. TAHA
Published — Wednesday 28 August 2013
Last update 27 August 2013 10:31 pm
Saudi Arabia ranked second globally and first at the Arab level in terms of the assets of sovereign wealth funds (SWFs), local media said quoting a report released by the SWF Institute.
According to the report, assets and foreign holdings of the Saudi Arabian Monetary Agency (SAMA), or the Kingdom’s central bank, stood at $675.9 billion in August of the current year compared to $532.8 billion in June.
Norway, represented by the Government Pension Fund, occupied the first rank globally on holding the biggest SWF assets valued at $737.2 billion, the report said.
The UAE, represented by Abu Dhabi Investment Authority (ADIA), came in the third position at $627 billion, followed by China Investment Corporation at $575.2 billion, SAFE Investment Company (China) at $567.9 billion, and Kuwait Investment Authority (KIA), in the sixth rank, at $386 billion.
Meanwhile, experts said the Kingdom’s enormous SWF assets send good and positive indications on the Saudi economy, which will remain attractive to foreign capitals and boost confidence of investors and denoting that the (Saudi) economy will remain safe even in case that oil revenues drop in a manner that will allow the government use such reserves, if necessary, Al-Riyadh daily quoted the experts as saying.
The Kingdom’s reserves (assets) are evidence that oil revenues are properly managed and appropriated in an effective and economic way where part of them is invested internally through supporting the general budget while surpluses are invested externally in semi-guaranteed government bonds, they said. The fund focuses on low-risk fixed income investments.
Based on the SWF Institute data, the volume of sovereign wealth funds is approaching $6 trillion in assets where increases in stock markets globally have helped lift the value of sovereign wealth assets.
SWF Institute President Michael Maduell said sovereign wealth funds are rising globally and springing up from Africa to certain states in the United States.
Asia and the Middle East are reportedly holding the bulk of sovereign wealth fund assets globally accounting for 40 percent and 35 percent respectively, whereas Europe has 17 percent of global totals, Africa and the two Americas have 3 percent for each while the remaining 2 percent went to other parts of the world.