Home ListingJune 10, 2014

Saudi Arabia Planning Second Sovereign Fund

<p title="temporary paragraph, click here to add a new paragraph">The country's second sovereign wealth fund will invest government budget surpluses. </p>

Reported by Featured Author

(June 10, 2014) — Saudi Arabia is planning to launch a second sovereign wealth fund to invest its budget surplus, according to Arabian news sources.

The country’s central bank, the Saudi Arabian Monetary Agency (SAMA), currently invests money generated by oil exports in an existing sovereign wealth fund, SAMA Foreign Holdings.

The strength of Saudi Arabia’s oil industry has helped grow this portfolio to be the third largest sovereign wealth fund in the world, behind those of Norway and Abu Dhabi.

Newspaper Asharq al-Awsat reported that the new fund—provisionally called the National Reserve Fund—would invest 30% of Saudi Arabia’s national budget surplus.

Last year, SAMA reported that the country had enjoyed a budget surplus in 2010 and 2011, and it projected a 14.03% income improvement on its GDP estimations in 2012. This would amount to 374 billion riyals ($100 billion).

According to Asharq al-Awsat‘s report, Saudi Arabia’s government is also likely to invest the proceeds of sales of state-owned assets into the new fund. Withdrawals will only be made by the state in an emergency.

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