Saudi securities investment soars

Saudi Arabia boosted its investment in foreign securities by nearly SR137 billion in the first four months of 2013 while it cut its deposits with foreign banks.

The surge in securities boosted the Gulf kingdom’s total foreign assets by nearly SR73 billion to peak at an all time high at the end of April, according to official data.

From around SR1,670 billion (DH1,654 billion) at the end of 2012, investment in foreign securities held by the Saudi Arabian Monetary Agency (SAMA) leaped to nearly SR1,807.5 billion (Dh1,789 billion) at the end of April, SAMA said in its April bulletin.

But deposits with banks abroad slumped to around SR518 billion (Dh513 billion) from SR576.4 billion (Dh570 billion) in the same period.

The surge in securities investment due to strong oil prices boosted the total foreign assets held by SAMA, the country’s central bank, to a record high of nearly SR2,558.4 billion (Dh2,533 billion) at the end of April from around SR2,485 billion (Dh2,460 billion) at the end of 2012, the report showed.

Their level at the end of April was nearly SR849 billion or about 50 per cent higher than the foreign assets at the end of 2009 and more than double their level in 2001.

Analysts said the steady rise in SAMA’s assets this year meant that the budget is recording a large surplus because of high oil prices, which have remained almost 50 per cent above Riyadh’s budgeted crude price of $70 a barrel.

Saudi Arabia, the largest Arab economy, projected 2013 revenue at SR829 billion and expenditure at a record high of SR820 billion, with a surplus of SRnine billion.

Independent forecasts in the world’s largest oil exporter showed the surplus could rocket by 20-30 times at the end of 2013 despite an expected rise in spending.

 “Based on our forecast of oil prices at $110 a barrel, we project a fiscal surplus of SR277 billion or 9.5 per cent of GDP,” National Commercial Bank (NCB) said.

“This will result in oil revenues of SR1,043.5 billion, representing a decrease of 8.5 per cent compared to actual oil revenues in 2012, which also takes into account a 3.7 per cent decline in export volume.”

Saudi Arabia had forecast a small deficit in 2012 but at the end of the year, it turned into a massive surplus of SR387 billion, the Kingdom’s second highest fiscal surplus after the record 2008 balance of SR581 billion.

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