27 Sep A Land of Investment Opportunities
One of the leading investment banks in Saudi Arabia, anb capital is active across the entire spectrum of capital market activity, from brokerage in local and international markets, to investment management, investment banking and alternative investments. In the following interview, anb capital’s CEO, Khalid S. Al-Ghamdi, provides an insight into the evolving Saudi investment environment.
How is Saudi Arabia’s unprecedented economic transformation shaping the role of investment banks in the country?
The Saudi growth story has only just begun. Estimates indicate that projects underway in the country require in excess of $1 trillion of funding up to 2030. With the banking sector’s loan-to-deposit ratio already at 100%, there will be a funding gap that will have to be bridged by capital markets. For example, we foresee Additional Tier 1 bond issuances by banks to increase their lending capacity and activity in equity issuances, securitizations and bond issuances.
Of course, there are challenges ahead. Hybrid capital and private credit markets are still to develop in Saudi Arabia. In this context, taking markets forward also means convincing investors and institutions to invest in or lend to projects that contribute to the diversification of the economy. Investment banks will play a critical role in this by leading the evolution of capital markets, not only to fund projects, but also for investors to realize value.
The Saudi stock market is now the 11th-largest globally. How much interest does it offer to international investors?
A seismic shift has taken place in Saudi capital markets since 2019 with the inclusion of our stock exchange in Morgan Stanley Capital International and FTSE indices. In 2018, the volume traded on the Saudi Exchange by qualified foreign investors was $14 billion or 3% of the total. In 2023, this figure reached $132 billion or about 19% of total. The regulatory environment has also been encouraging, with access to the exchange for foreign investors becoming easier.
Saudi Arabia is one of the world’s most exciting and dynamic markets and potentially the only true land of opportunity right now. We see global interest in our country, with businesspeople, investors and tourists from all over the world pouring in.
Founded in 2008, what are some of the ways in which anb capital is advancing Saudi Arabia’s investment sphere?
We’ve experienced a revitalization in recent years, more than tripling our bottomline and investing heavily in our people and infrastructure. We have also brought in new products. For example, this year we launched our Digital and IT Equity Fund, which is Saudi Arabia’s first thematic fund focused on that sector. This fund fully dovetails with the objectives of Vision 2030, where we have seen IT-driven transformations across all public sectors that have fundamentally changed how the country operates.
We have also greatly expanded our asset management product offering, with four new funds and investment strategies launched in 2023. We have launched our first private equity funds as well, while our successes in real estate are unparalleled. Furthermore, we’ve gained traction in investment banking, with some of the country’s largest corporations and institutions as our clients.