Saudi trades on US stock market surge 162% year-on-year in Q1

Saudi trades on US stock market surge 162% year-on-year in Q1
Overall, in 2020 the total amount traded by Saudis in the US market increased 606 percent year-on-year to SR323.365 billion. (Shutterstock)
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Updated 19 May 2021

Saudi trades on US stock market surge 162% year-on-year in Q1

Saudi trades on US stock market surge 162% year-on-year in Q1
  • Foreign investors have piled into US stocks over the last year as a weaker US dollar helped overseas inflows reached record highs

DUBAI: The total amount invested by Saudi traders in the US stock market through companies licensed by the Capital Market Authority (CMA) surged 162 percent year-on-year to SR77.4 billion ($20.64 billion) in the first quarter.

While the first three months of the year reported a strong year-on-year increase, the last three quarters of 2020 saw such massive growth in US trades that the first quarter of 2021 was still 21 percent lower than the final quarter of 2020, according to data compiled by financial website Argaam.

Foreign investors have piled into US stocks over the last year as a weaker US dollar helped overseas inflows reached record highs.

Overall, in 2020 the total amount traded by Saudis in the US market increased 606 percent year-on-year to SR323.365 billion.

The year 2020 was a wild one for Wall Street, with a 9.5 percent drop in the S&P 500 on March 12, the biggest one-day percentage decline since the crash of 1987. However, the fall only lasted until March 23, when the market began to bottom out.

The Dow Jones Industrial Average closed the year up 16.3 percent and the Nasdaq gained 43.6 percent, its highest since 2009. The strongest performing stock was Tesla, which was up 743 percent during the year.

Elon Musk’s electric vehicle brand was also the most traded, accounting for 7 percent of all trades, according to data from Refinitiv. 

When it comes to overseas trading, the US market is the dominant player for Saudi investors, accounting for 98 percent of all foreign trades authorized by the CMA. The next biggest, the Gulf Cooperation Council, accounted for 1.1 percent, followed by Europe (0.4 percent) and Asia (0.1 percent).

The data comes as it was also revealed this week that Saudi Arabia’s sovereign wealth fund — the Public Investment Fund (PIF) — increased its US stock holdings to by around 20 percent quarter-on-quarter to $15.4 billion in the first quarter of 2021.

The PIF invested $141 million in e-commerce company Coupang and boosted its investments in American video game companies Activision Blizzard and Electronic Arts. The $400 billion fund’s biggest US stock holding was in ride-hailing app Uber. The PIF bought a $3.5 billion stake in Uber in 2016, which is now worth nearly $4 billion.

California-based Lucid Motors, which is also backed by PIF, on Wednesday announced it will be listed on the Nasdaq exchange once its merger with Churchill Capital Corp IV (CCIV) is complete.

The US-based electric vehicle maker earlier announced it was merging with New-York-listed CCIV, a blank check company that is publicly listed on the New York Stock Exchange.

The merger comes as the carmaker prepares for the delivery of its first vehicle, Lucid Air, a 500-mile range luxury electric sedan that is powered by the company’s proprietary electric powertrain technology.

The transaction is expected to provide additional growth capital for Lucid, which currently employs nearly 2,000 people, and plans to add around 3,000 more by the end of 2022.