The total amount of assets held in investment funds in Saudi Arabia dropped by 1.24 billion Saudi riyals during the third quarter of last year to 117.86 billion Saudi riyals ($31.4 billion), from 119.1 billion Saudi riyals in the second quarter, the latest data released by Saudi Arabian Monetary Authority showed.

Despite the decrease in the overall assets held in investment funds, assets of real estate investment funds recorded a 26 percent jump in the third quarter to 11.7 billion Saudi riyals, from 9.3 billion Saudi riyals during the earlier quarter.

A survey by market research firm YouGov in June last year showed that most investors in Saudi Arabia are committed to real estate as their main investment vehicle, with almost 85 percent of residents in Saudi Arabia have invested in property at some stage. (Read more here).

The other three types of investment funds that also recorded an increase in assets during the third quarter, as per SAMA data, were those of domestic shares, other domestic assets, as well as foreign money market instruments.

Funds of domestic money markets instruments, however, showed a 6.6 percent decrease in assets to 55.4 billion Saudi riyals during the third quarter, from Saudi riyals from 59.3 billion in the second quarter.

Funds held in foreign shares, domestic sukuk and bonds, and foreign bonds all recorded slight decreases in assets in the third quarter. Assets of foreign shares declined to 4.6 billion Saudi riyals, from 4.9 billion in the second quarter. Funds held in domestic sukuk and bonds decreased to 4.3 billion, from 4.6 billion, while those of foreign bonds stood at 1.3 billion Saudi riyals, down from 1.5 billion in the second quarter of the year.

The investment climate in Saudi Arabia has been impacted by the recent turbulence that followed the murder of Saudi dissident Jamal Khashoggi, but the kingdom signed deals worth almost $50 billion at a high profile investment summit in October, despite a boycott by global politicians and business leaders. (Read more here).

A study released prior to Khashoggi’s death in September last year showed that 75 percent of investment professionals in the region expect more money from foreign investors to pour into locally-domiciled funds over the next five years. (Read more here).

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(Writing by Nada Al Rifai; Editing by Michael Fahy)

(nada.rifai@refinitiv.com)

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