Weekly Insights 23 Aug 2024: High dependency on oil exports in the GCC notwithstanding, investment & non-oil revenues offer support

Weekly Insights 23 Aug 2024: High dependency on oil exports in the GCC notwithstanding, investment & non-oil revenues offer support

1. Saudi PIF gross AUM surged 28.5% yoy to SAR 2.9trn in 2023

• PIF assets under management has grown overtime (SAR 2.9trn in 2023 vs less than SAR 2trn in 2021 and SAR 563bn in 2015), with international investments reduced to 20% in 2023 (2021: 29%). An 8.7% shareholders’ return was generated by end-’23. PIF aims to increase AUM to approximately SAR 4trn by 2025, raising the non-oil GDP contribution of PIF & subsidiaries to a cumulative SAR 1.2trn.
• Domestic investments are on the rise, accounting for 76% of total AUM in 2023. Saudi sector development & equity holdings share was more than 3/4-th of local investments (and 32.8% & 27.1% of overall AUM). Saudi giga projects stood at 8.4% of overall AUM.
• By sector, energy and real estate together accounted for about 40%+ of total investments in 2023; financials and industrials shares were 7.3% and 3.1% respectively.

2. Saudi exports & imports fell by 5.8% & 5.1% yoy in Jun; surplus stands at SAR 30.2bn

• Saudi Arabia’s exports declined by 16.4% month-on-month and 5.8% yoy to SAR 87.9bn in Jun, the lowest since Jun 2021. Oil exports fell by 12.6% mom and 9.3% yoy to SAR 66.3bn – lowest since Aug 2021. Oil exports accounted for 75.4% of total exports in Jun.
• Both non-oil exports and re-exports fell in mom terms by 17.9% and 42.4% respectively; re-exports almost halved to SAR 5.9bn. In yoy terms, non-oil exports inched up (+5% to SAR 15.7bn) and re-exports surged by 30.9% to SAR 5.9bn in Jun (driven by China, UAE).
• Imports fell by 22.5% mom and 5.1% yoy to SAR 57.7bn in Jun, thereby narrowing trade surplus to SAR 30.2bn (vs May: SAR 30.8bn; Jun 2023: SAR 32.5bn).
• Oil exports to top 5 destinations (China, Japan, South Korea, India & Poland) stood at 57% of total oil exports in Jun. Share of top 25 nations was 93.4%.
• China was the top trade partner in Jun: accounting for 16.6% of overall exports and 20.9% of total imports.
• Most GCC nations ran non-oil trade surpluses with KSA; Qatar turned to a deficit

3. Saudi Gender Statistics report 2023 highlighted a rising trend in Saudi population & higher life expectancy for Saudi females (80.9) vs males (75.3). While number of male students were much higher in short-term education, this was reversed in both Bachelors & Masters levels. While Saudi women have increasingly become company owners, proportion of patents & securities ownership is still leaning towards men

4. Oman budget surplus narrowed to OMR 391mn as of H1 2024

• Oman’s budget surplus narrowed to OMR 391mn as of end-Jun, almost half the surplus in H1 2023, as revenues fell by 2.3% yoy alongside a 2.1% uptick in spending. Average oil price stood at USD 82 (-1.2% yoy) as of Jun and average daily oil production down by 5.5% to 1003k barrels per day.
• Public revenues fell by 2.3% yoy to OMR 6.197bn as of Jun 2024: net oil revenues inched up by 3.2% to OMR 3.4bn while net gas revenues plunged by 15.4% to OMR 943mn. Net O&G accounted for 69.5% of revenues.
• Expenditure grew by a moderate 2.1% yoy to OMR 5.806bn at end-Jun: current expenditure edged slightly lower (-0.3% yoy to OMR 4.07bn) while development expenditure grew by 31% (to OMR 502mn). Development spending accounted for 56% of total development spending allocated for 2024. Social protection system, electricity and oil product subsidy together accounted for 64% of contributions and other expenses.
• Payments to Oman’s private sector was more than OMR 558mn as of end-Q2, according to the Ministry of Finance.
• Furthermore, repayment of public debt led to its decline to OMR 14.4bn as of end-Q2 (vs OMR 15.3bn in 2023 and OMR 20.8 in 2021.

5. Saudi Arabia’s US Treasuries holdings, at USD 140.3bn in Jun 2024, is the highest since Mar 2020

• Foreign holdings of Treasuries hit a record high of USD 8.21trn in Jun (May: USD 8.132trn).
• Japan, largest foreign holder of US Treasuries, saw holdings shrink to USD 1.128trn (-0.94% mom).
• China increased its holdings to USD 780.2bn (May: USD 768.3bn; end-2023: USD 816.3bn).
• Saudi Arabia is the 17th largest investor in US Treasuries as of H1 2024 (USD 140.3bn) – highest since Mar 2020 (USD 159.1bn).
• In May 2024, the 3 GCC nations – Kuwait, UAE and Saudi Arabia – increased their holdings in yoy terms. In mom terms, only UAE posted a 1% drop in holdings.
• Compared to end-2023, Kuwait increased their holdings (by 0.3%) alongside Saudi Arabia and UAE whose holdings surged by 6.2% and 9.6% respectively.
• KSA’s holdings grew by 2.87% mom and 29.7% yoy to USD 140.3bn in Jun. UAE’s holdings clocked in at USD 70.1bn in Jun, up by 7.5% yoy (but down by 1% mom).

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