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

Saudi PIF AUM 2023. Saudi trade in H1 2024. Saudi gender stats 2023. Oman budget surplus H1 2024. Saudi US Treasury holdings highest since Mar 2020

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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).