Nearly half of people living in Saudi Arabia do not save anything, survey finds

Updated 13 April 2018
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Nearly half of people living in Saudi Arabia do not save anything, survey finds

  • Nearly half of all people living in Saudi Arabia have no savings
  • Just 17% of people in the Kingdom have saved less than 5% of their income

JEDDAH: Some 45 per cent of people living in Saudi Arabia do not save any money at all out of their monthly income, according to a new survey of attitudes towards saving and investment among residents in the Kingdom.

The survey, conducted by the Jeddah based wealth management firm SEDCO Holdings and Dubai-based online finance group Souqamal.com, found that most respondents blamed a low level of income for their failure to put money aside.

It also found that only a further 17 percent saved less than 5 percent, while 38 percent saved more than 6 percent.

The results come as the Ministry of Housing is asking Saudis to save for a deposit on their future home. It finds a lack of a savings culture that makes this goal difficult.

Amr Banaja, a SEDCO executive, said: “Anyone should be able to achieve what they aspire for financial without resorting to borrowing or depriving themselves of what they desire. One can do this by properly managing their finances, shunning needless expense, and choosing appropriate saving and investment opportunities.”

When asked about the reason behind their failure to respond, 60 percent said their level of income prevented it. Since 2014, official statistics show that the average levels of income have risen by 13 percent in the private sector, and 6 percent in government employment, the survey compilers said.

The survey raises the question of whether the cost of living in the Kingdom has risen faster than salaries. According to official figures inflation rose by 7.6 percent between 2014 and 2016. It fell to near zero last year, but jumped again at the beginning of this year, with the introduction of value added tax.

The last official figures showed consumer prices rose 2.7 percent in February, marginally down from the 3 percent of January.

The survey also found that 83 percent of respondents have no long term investment plans, showing a lack of awareness of investment techniques and practices.

Ambareen Musa, founder and CEO of Souqamal, said: “Saving and investment should go hand in hand. Start with a monthly budget and figure out what your basic necessities are that you can save every month.”

SEDCO has launched the Riyali financial literacy program to make people aware of the basics of investment.

The survey was conducted among 2,000 respondents, which included Saudi citizens and expatriates, in line with the Kingdom’s demographics.


Dubai regulators move against Abraaj Capital

Updated 17 August 2018
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Dubai regulators move against Abraaj Capital

  • Dubai regulators have implemented a winding up order against Abraaj Capital stopping it from doing any new business in the emirate’s financial center
  • The DFSA said it has also stopped Abraaj Capital from moving funds to other parts of the group

DUBAI: Dubai regulators have moved against Abraaj Capital, the UAE arm of the beleaguered private equity group, implementing a winding up order against it and stopping it doing any new business in the emirate’s financial center.

The Dubai Financial Services Authority, the regulatory arm of the Dubai International Financial Center (DIFC), announced the moves after the DIFC Courts earlier this month received a petition to wind up the troubled firm under UAE insolvency laws.

The court has appointed two liquidators from the accounting firm Deloitte to oversee the winding up order.

“The DFSA will continue to take all necessary actions within its remit to protect the interests of investors and the DIFC,” the regulator said in a statement.

 

The DFSA also said it has stopped Abraaj Capital from moving funds to other parts of the group.


The DFSA has been monitoring events at the company since the scandal at Abraaj broke in February, involving redirection of investment funds to purposes for which they were not intended.

Only a relatively small part of Abraaj’s operations fall under the remit of the DFSA. Most of its business and assets are located in the Cayman Islands, the domicile for its ultimate holding company Abraaj Holdings Limited (AHL) and its main operation business Abraaj Investment Management. The Cayman entities are also going through liquidation procedures.

The DFSA said: “Given the onset of financial difficulties of the wider Abraaj Group, the DFSA has been closely monitoring the activities of its regulated entity ACL. The DFSA has taken regulatory actions over the past few months in order to safeguard the interests of investors and the DIFC.

“Given such actions and the current matters surrounding the Abraaj Group, the DFSA continues to monitor the limited financial services activities currently being undertaken by ACL,” it added.

ACL was authorized to conduct various financial services from DIFC, including managing assets and fund administration, but restricted to funds established by the firm or members of its group.

It could also advise on financial products, arranging deals in investments, and arranging and advising on credit.

It is unprecedented for the DFSA to comment on a case while it is still under investigation, but the application in the DIFC Courts on Aug. 1 presented an opportunity to address investors and DIFC members who were concerned about the scandal, which some observers believe has been damaging for Dubai’s reputation as a regional financial hub.

FACTOID

The Dubai Financial Services Authority has been monitoring events at Abraaj since a scandal emerged involving redirection of investment funds to purposes for which they were not intended.