JEDDAH: A trickle, not a flood of foreign money is likely to enter Saudi Arabia’s stock market in coming months as the $575 billion bourse, the Arab world’s biggest, opens to direct foreign investment.
Saudi Arabia is one of the world’s last major markets to open up, and nobody doubts the latent interest among foreign funds.
The plunge of oil prices has slashed the Kingdom’s export revenues but it has not dimmed the long-term attractions of its rapidly growing population or wide range of companies.
If the market-opening causes Saudi Arabia to enter equity benchmarks such as MSCI’s emerging market index, it will attract tens of billions of dollars of new foreign money.
The trouble is, inclusion in the MSCI index is at least two years away.
Moreover, the valuations of many Saudi stocks don’t look particularly attractive to foreign funds at present.
Operational issues such as the rules for settling trades are another obstacle. And by imposing strict foreign ownership limits, Saudi regulators have made clear they don’t want any sudden deluge of international money.
The result is likely to be a cautious trickle of additional foreign funds into Saudi Arabia — perhaps tens of millions or a few hundred million dollars a month, accelerating as MSCI inclusion nears — rather than any sudden surge.
“As they transition from a retail-dominated market to one with more institutions, they want to do it in a way that won’t hurt anybody,” Sanyalak Manibhandu, manager of research at NBAD Securities in Abu Dhabi, said of Saudi regulators’ approach.
“They want to make sure that retail investors don’t get hurt with too much money coming in at the same time.”
INDEXES
At present, non-resident foreigners are limited to indirect investment in Saudi stocks through instruments such as swaps and exchange-traded funds, which can be inconvenient and expensive.
They are estimated to own about 3 percent of the market.
From June 15, they will be allowed to buy stocks directly through licensed institutions. The Capital Market Authority announced rules governing the reform recently.
Saudi Arabia’s entry into global equity indexes is not certain; it would need to satisfy the index compilers in areas such as market liquidity, investor access and transparency.
But expectations for entry are strong enough that MSCI has compiled a provisional list of 18 Saudi stocks for inclusion.
Petrochemicals giant Saudi Basic Industries, National Commercial Bank and Saudi Telecom account for 45 percent of the group.
EFG Hermes estimates the provisional list would give Saudi Arabia a weight of 1.66 percent in MSCI’s emerging market index.
“Assuming allocation by passive and active global emerging market funds at weight, this should translate into $4.2 billion of passive inflows and $16.4 billion of active inflows,” EFG Hermes analyst Mohamad Al-Haj said.
MSCI itself has estimated total inflows due to index entry at $27 billion.
But passive funds would only enter when the inclusion actually took effect; MSCI says the earliest time for this would be June 2017.
Active funds have more flexibility, and in the glow of Saudi Arabia’s market-opening, they may take a fresh look at the country. US asset manager BlackRock announced in October that it would establish a US-listed, exchange-traded fund to invest in Saudi stocks.
But it is not yet clear how much money the fund will raise.
“Active money will probably flow in increments, and will depend on market valuations among other factors,” Haj said.
Valuations are not great at present.
With a forward price-to-earnings ratio of 17.2, Saudi Arabia is pricier than even developed market benchmarks such as the Dow Jones Industrial Average at 16.0 and Britain’s FTSE 100 at 16.5.
REGULATOR
There are other challenges. Short-selling is banned, reducing the ability to hedge, and trades must be settled on the same day — meaning foreigners will need to have large amounts of money on hand before trading, which may be inconvenient given Riyadh’s time zone and its Sunday-Thursday business week.
Many big emerging markets have settlement after two days.
Also, the rules announced this week are restrictive. Foreigners can directly own no more than 10 percent of the market by value — in many other big bourses, they own 20 percent or more — while a single foreign investor can hold no more than 5 percent of any listed Saudi firm, and total foreign ownership of a firm is limited to 20 percent.
The rules are identical in major respects to draft regulations which the CMA released for comment last August. BlackRock said the draft was “overly restrictive and could in fact disincentivise foreign investment in Saudi stocks.”
Disincentivising large-scale foreign buying of stocks may be just what the regulator intends, for now at least.
It wants to avoid the wild swings seen in the UAE and Qatar last year, when those markets’ entry into the MSCI emerging market index caused speculative bubbles to form and burst.
Also, the CMA may be mindful of the political sensitivities of having foreigners build large stakes in some of the Kingdom’s corporate crown jewels.
“Hopefully as the market moves and as the market matures, things could be relaxed,” CMA chairman Mohammed Aljadaan said this week of the possibility of easing ownership restrictions in future.
Saudi officials say they are not opening the market because Riyadh needs the money. Instead, they want to use foreign institutions to stabilize the market, obtain expertise and expose firms to market discipline as the economy diversifies.
The licensing process for foreign institutional investors may also slow fund inflows.
The rules indicate officials will normally decide on applications within 11 days of receiving them, but it is not yet clear how quickly licenses will actually be awarded.
China used a similar Qualified Foreign Institutional Investor system to manage a cautious, gradual entry of foreign funds into its stock market.
Prices of most Saudi blue chips have dropped slightly since the investment rules were announced recently, suggesting local investors’ hopes of profiting from a big influx of foreign money are fading.
Foreign funds keen to enter Saudi exchange
Foreign funds keen to enter Saudi exchange
Saudi Arabia’s flynas launches weekly Dammam-Red Sea flights to boost tourism connectivity
- New service operates twice weekly, on Thursdays and Saturdays
- RSI is key in helping the Kingdom attract a significant amount of tourists by 2030
RIYADH: Saudi low-cost airline flynas has launched a new direct route connecting Dammam’s King Fahd International Airport to the Red Sea, enhancing access to the Kingdom’s premier tourism destination.
The inaugural flight, which landed on Dec. 26, marked the first direct connection between the Eastern Province and the Red Sea International Airport.
The new routes support Saudi Arabia’s Vision 2030, which aims to make the Kingdom a global tourism hub by enhancing connectivity and infrastructure, while RSI is key in helping the nation attract a significant amount of tourists by the end of the decade.
The new service operates twice weekly, on Thursdays and Saturdays, and complements existing flights from Riyadh and Jeddah, strengthening RSI’s role as a domestic and international tourism hub.
Since September 2023, The Red Sea destination has hosted visitors at its five luxury resorts, supported by national carrier Saudia’s regular domestic services.
In 2024, RSI achieved another milestone by welcoming its first international flight from Dubai International Airport, operated by flydubai.
These developments highlight RSI’s growing role as a key gateway to Saudi Arabia’s tourism offerings.
Once fully operational, RSI will run entirely on renewable energy generated by 760,500 photovoltaic panels and one of the world’s largest off-grid battery energy storage systems.
Current airside operations, including lighting, navigation, and meteorological equipment, are already exclusively powered by renewable energy.
Upon its completion in 2030, the expansive development will feature 50 resorts offering up to 8,000 hotel rooms and more than 1,000 residential units across 22 islands and six inland sites.
The development will also feature luxury marinas, golf courses, diverse dining options, and entertainment facilities, positioning it as a global leader in sustainable and luxury tourism.
In November, flynas added two new African destinations to its network beginning on Jan. 8.
The airline will operate three weekly flights from Riyadh to Uganda and three from Jeddah to Djibouti, according to the company’s statement.
The expansion is part of the airline’s “We Connect the World to the Kingdom” initiative and supports Saudi Arabia’s National Civil Aviation Strategy, which aims to expand connectivity to 250 international destinations and reach 330 million passengers.
The routes to Uganda and Djibouti also align with Saudi Arabia’s goal of welcoming 150 million tourists annually by 2030 and advancing the Pilgrims Experience Program, which seeks to streamline travel access to the holy cities of Makkah and Madinah.
Red Sea International is strategically located to serve 250 million people within a three-hour flight radius, covering the Middle East, parts of Europe, and Africa.
NEOM’s Oxagon leads the way in sustainable industrial revolution
RIYADH: Oxagon, the industrial cornerstone of NEOM, has solidified its position as a critical hub for logistics and manufacturing, perfectly aligned with Saudi Arabia’s Vision 2030.
Through a blend of innovation, sustainability, and technological progress, Oxagon has become a global model for future industrial development. Spanning approximately 50 sq. km, it ranks among the largest floating industrial complexes worldwide and is on track to achieve 100 percent renewable energy use by 2030.
The accomplishments of 2024 underscore Oxagon’s commitment to economic diversification and environmental responsibility, offering valuable lessons for businesses. By prioritizing sustainability, embracing cutting-edge technologies, and showcasing adaptability, Oxagon sets new benchmarks for the logistics and manufacturing sectors.
Driving sustainability
Oxagon stands as a beacon of sustainable practices within logistics and manufacturing. Paolo Carlomagno, partner at Arthur D. Little Middle East, notes that Oxagon’s initiatives align with the core objectives of Saudi Vision 2030, aiming to create a diversified economy while reducing environmental impact.
“For example, Oxagon’s logistics operations integrate renewable energy sources, such as solar and wind, which have collectively reduced carbon emissions by an estimated 25 percent compared to traditional models,” Carlomagno explained.
“Additionally, the manufacturing ecosystem embraces circular economy principles, focusing on resource efficiency and waste minimization. By 2026, Oxagon’s waste-to-resource initiatives are projected to recycle 90 percent of industrial waste generated within the facility,” he added.
Carlomagno further emphasized that advanced systems such as green building technologies and smart water management are integral to Oxagon’s strategy to minimize its environmental footprint.
“For instance, Oxagon employs advanced desalination techniques that use 40 percent less energy than conventional methods, providing a sustainable water supply for both industrial operations and local communities,” he noted. “These efforts create a resilient, eco-friendly industrial ecosystem capable of adapting to future challenges.”
Collaboration is central to Oxagon’s strategy, with partnerships with global corporations like Siemens and Schneider Electric driving the accelerated adoption of sustainable practices.
“These collaborations have led to the implementation of innovative solutions, such as energy-efficient manufacturing systems and low-carbon supply chain logistics, setting a standard for the region and beyond,” he added.
FASTFACTS
Oxagon’s logistics operations integrate renewable energy sources, such as solar and wind, which have collectively reduced carbon emissions by an estimated 25 percent compared to traditional models.
Oxagon employs advanced desalination techniques that use 40 percent less energy than conventional methods, providing a sustainable water supply for both industrial operations and local communities.
Real-time demand forecasting has allowed Oxagon’s partners to reduce inventory holding costs by 20 percent, reflecting its agility in a dynamic global market.
Technological innovations
In 2024, Oxagon has continued to leverage cutting-edge technologies to revolutionize logistics and manufacturing operations. Carlomagno noted that technologies such as artificial intelligence, robotics, and the Internet of Things have played a crucial role in streamlining processes, enhancing predictive maintenance, and optimizing inventory management, resulting in efficiency gains of approximately 30 percent compared to 2023.
“One notable advancement has been the integration of autonomous electric vehicles within its logistics network. These vehicles, combined with AI-driven route optimization algorithms, have reduced delivery times by 20 percent and operational costs by 15 percent,” he said.
“Additionally, smart manufacturing hubs equipped with IoT-enabled machinery have increased production accuracy by 25 percent, while reducing downtime through predictive maintenance protocols.”
Looking forward, Carlomagno highlighted that Oxagon’s commitment to emerging technologies promises further industry disruption.
“The adoption of blockchain for transparent supply chain management is expected to reduce fraud and improve traceability, while quantum computing — currently under exploration — offers the potential to solve complex logistical challenges at unprecedented speeds. Such innovations are expected to drive a projected 10 percent annual growth rate in Oxagon’s industrial output over the next five years,” he said.
Federico Pienovi, chief business officer and CEO for APAC & MENA at Globant, outlined Oxagon’s use of AI-driven analytics, blockchain-enabled supply chain management, and autonomous systems to create a highly connected and efficient operational ecosystem. These advancements have improved transparency, reduced inefficiencies, and streamlined processes, enabling smarter decision-making.
“For example, AI and machine learning have played pivotal roles in logistics, enabling predictive models that optimize shipping schedules. By analyzing port availability in real-time, these systems ensure vessels depart and arrive with precision, avoiding costly delays and idle time. Similarly, blockchain technology ensures supply chain transparency, building trust and resilience across global operations,” said the CEO.
In manufacturing, robotics, supported by AI, has revolutionized production lines, offering unmatched precision, scalability, and flexibility.
“IoT sensors have elevated predictive maintenance to a new level, reducing downtime and enhancing overall equipment efficiency. Combined, these innovations are driving higher product quality, creative business models, and smarter scalability,” he said.
Looking to the future, Pienovi emphasized that Oxagon’s connected experiences will further enhance operations, not just in factories and logistics but also for employees. By integrating data from IoT, AI, and machine learning, Oxagon offers seamless workflows while maintaining a people-centric approach, improving employee satisfaction, operational agility, and productivity.
Evolving market dynamics
As global markets evolve, Oxagon provides a model for how businesses can adapt and thrive. Carlomagno noted that Oxagon’s strategy revolves around three core pillars: collaboration, sustainability, and digital transformation. By forming strategic partnerships with technology providers, academic institutions, and multinational corporations, Oxagon has positioned itself as an innovation hub.
“For example, a partnership with MIT enabled the establishment of a data-driven logistics optimization platform that has increased supply chain efficiency by 15 percent,” he said.
Oxagon’s consumer-centric approach also sets it apart. By leveraging data analytics and consumer feedback loops, the company ensures its products and services meet evolving market demands.
“For instance, real-time demand forecasting has allowed Oxagon’s partners to reduce inventory holding costs by 20 percent, reflecting its agility in a dynamic global market,” said Carlomagno.
Pienovi emphasized that embracing digital transformation is a critical strategy for future success.
“Oxagon has placed advanced technologies like AI, IoT, edge computing, and automation at the core of its operations. By integrating predictive AI models, Oxagon has optimized its supply chain management, enabling it to forecast demand and identify the most efficient logistics routes,” he said.
The CEO added: “At the same time, IoT sensors and robust platforms have elevated operational efficiency, improved product quality, and enhanced risk mitigation efforts. These technologies have not only transformed manufacturing and logistics but have also paved the way for connected experiences, where personalized insights enhance decision-making across operations.”
Sustainability remains a key pillar of Oxagon’s strategy. “By integrating circular economy principles, Oxagon has redefined what it means to operate in an environmentally conscious manner, aligning itself with the growing consumer demand for responsible and eco-friendly brands. Its efforts in sustainability are not merely a corporate responsibility but also a strategic driver for differentiation in the global market,” said Pienovi.
In an increasingly digital business environment, Pienovi highlighted the growing importance of data privacy and cybersecurity.
“Oxagon’s commitment to compliance with regulations, such as Saudi Arabia’s NCA and international standards, underscores its focus on maintaining trust and ensuring secure operations,” he concluded.
As global business becomes more interconnected, Oxagon’s initiatives in 2024 provide a powerful model for how businesses can successfully adapt by integrating innovation, sustainability, and collaboration.
Jordan to record nearly 3% economic growth in 2025, experts project
RIYADH: Jordan is set to experience an economic growth rate between 2.5 percent and 3 percent in 2025, bolstered by improvements in the business environment and increased investments, according to economic experts.
Adli Kandah noted that this growth would likely lead to a slight reduction in unemployment, although challenges in the labor market persist, the Jordan News Agency reported.
The projected growth aligns with the government’s recent corrective measures in the final quarter of 2024, including reduced penalties for unlicensed vehicles and tax cuts for electric cars. These steps are part of a broader effort to improve economic conditions and enhance both financial and social stability.
Jordan has maintained a steady average growth rate of 2.5 percent over the past decade, according to the World Bank, providing a solid foundation for future economic expansion.
Kandah also highlighted positive indicators, including regional developments that could benefit Jordan, particularly in foreign trade and investment sectors. He pointed to potential gains from developments in Syria, especially if international sanctions are lifted.
Raad Al-Tal, professor of Economics at the University of Jordan, noted that the country’s political stability and economic reforms have helped it remain resilient. Despite regional geopolitical challenges, including the ongoing situation in Gaza, Jordan has shown adaptability.
“The tourism sector, in particular, has shown notable recovery, bolstered by improved regional security and increased visitor numbers,” Al-Tal said, as reported by Pentra.
He also emphasized the positive impact of remittances from Jordanian expatriates, which have strengthened the country’s monetary reserves.
Ahmad Al-Majali, an economic researcher, also confirmed that despite external pressures and regional political turbulence, Jordan’s economy has shown positive performance in 2024.
Al-Majali attributed this resilience to the central role of monetary policy in maintaining stability and the progress achieved under the Economic Modernization Vision.
“The monetary policy has served as a fundamental pillar for the economy during this period,” he said.
He further emphasized that the Economic Modernization Vision has spurred optimism among investors, contributing to increased economic activity.
Looking ahead to 2025, experts anticipate that lower global interest rates could reduce local financing costs, providing an additional boost to investment. However, they stress that continued economic reforms and efficient public spending are crucial to sustaining this positive trajectory.
Public finances of GCC countries show surplus in 2024, 2025: report
- GCC countries posted a financial surplus of $134 billion in 2022, representing 6.1% of their GDP
- Total public spending in the GCC reached its highest level in 2023, hitting $639 billion
RIYADH: Public finances in the Gulf Cooperation Council countries are expected to maintain a stable trajectory, with a projected stabilization of public debt at 28 percent of the gross domestic product in 2024 and 2025.
According to the latest data from the Gulf Statistical Center, the region’s fiscal outlook remains positive, building on a surplus of $2 billion in 2023, Emirati news agency WAM reported.
This comes as GCC countries posted a financial surplus of $134 billion in 2022, representing 6.1 percent of their GDP. Public debt reached approximately $628 billion in 2023, compared to $144 billion in 2014, while the debt-to-GDP ratio peaked at 40.3 percent in 2020 before declining to 29.8 percent in 2023.
Earlier this month, Saudi Arabia reached a milestone in public financial management by successfully transitioning to the International Public Sector Accounting Standards on an accrual basis. The move aligns with the Kingdom’s broader efforts to modernize its public sector financial practices as part of its Vision 2030 agenda.
GCC-Stat said that financial risks for countries in the region will remain low in the short term, driven by forecasts of locally and globally stable or declining interest rates.
Citing recent reports from credit rating agencies, GCC-Stat added that the credit attractiveness of the regional countries is expected to improve, which will allow for the rescheduling of public debts at lower financial costs.
Affirming the growth of GCC economies, credit rating agency Moody’s projected in November that Saudi Arabia’s economy will grow by 1.7 percent this year, before accelerating to 4.7 percent in 2025 and 2026. The agency also forecasted that the UAE’s economy will expand by 3.8 percent in 2024 and 4.8 percent in 2025.
GCC-Stat said that the fiscal budget reforms planned by GCC nations could contribute to striking a balance between maintaining economic growth and sustaining public spending.
According to the report, total public revenues in the GCC amounted to $641 billion in 2023, with oil revenues contributing 62 per cent. In 2022, public revenues in the region totaled $723 billion, with oil revenues accounting for 67 percent.
Total public spending in the GCC reached its highest level in 2023, hitting $639 billion. The report said that current spending accounted for 85 percent of public spending in 2023, while investment spending comprised 15 percent.
Saudi startup investment shifts focus to AI, enterprise software, and SMEs
RIYADH: Saudi Arabia’s startup ecosystem is gaining momentum, propelled by government-backed initiatives and an influx of investor interest. While the fintech sector remains a primary focus, emerging opportunities in artificial intelligence, enterprise systems, and small-to-medium enterprise investments are drawing attention.
As part of its Vision 2030 initiative to reduce its dependence on oil, Saudi Arabia is positioning itself as a regional hub for innovation, creating fertile ground for startups and attracting significant venture capital flows.
Why fintech?
Tushar Singhvi, deputy CEO of Crescent Enterprises and head of its investment platform, CE-Ventures, discussed the enduring potential of the fintech sector in an interview with Arab News. He pointed to the Kingdom's robust national strategy, which aims to establish 525 fintech companies by 2030, as a key driver behind sustained growth.
“Saudi Arabia’s fintech sector is set for sustained growth, driven by a clear national strategy to have 525 fintech companies by 2030,” Singhvi said.
In 2023, Saudi Arabia captured 58 percent of all fintech venture capital in the Middle East and North Africa. Singhvi also highlighted pivotal moves like the acquisition of Tweeq by Tabby and the launch of Samsung Pay, both of which support Saudi Arabia’s goal of becoming a cashless society.
“These efforts position Saudi Arabia as a leader in fintech innovation, making the sector highly attractive to investors,” Singhvi stated.
He added that this fintech momentum is aligned with the broader push for economic diversification. Vision 2030, Saudi Arabia’s ambitious roadmap for its post-oil economy, is channeling investments into long-term growth sectors like fintech, logistics, and healthcare.
“Investors are focusing on sectors with long-term growth potential, like financial services, healthcare, and renewable energy,” Singhvi said, emphasizing a rising interest in ESG-aligned investments that prioritize sustainability and social impact.
The fintech sector’s growth is further accelerated by the relative underdevelopment of traditional financial services in the region, according to Khaled Talhouni, managing partner at Nuwa Capital. He noted that the services available to both consumers and businesses from traditional financial institutions remain limited compared to the maturity of the overall economy.
“The availability and depth of services to both consumers and firms from traditional financial institutions like banks remains woefully under-developed relative to the maturity of the overall economy,” Talhouni explained.
This gap presents significant opportunities for fintech startups. However, Talhouni anticipates market consolidation, with smaller companies potentially being acquired by larger players. “I do suspect some consolidation in the space with smaller players folding into larger ones,” he said.
The rise of AI
AI is another area where Saudi Arabia is positioning itself for major growth. Singhvi pointed to the partnership between the Saudi Data and Artificial Intelligence Authority and NVIDIA to build one of the largest high-performance computing data centers in MENA.
“Saudi Arabia is rapidly aligning with global AI trends, aiming to be a top 15 AI leader by 2030,” Singhvi explained. Along with such investments, there is a concerted effort to build a skilled workforce, ensuring that the Kingdom can adopt AI and enterprise technologies to fuel its digital transformation.
Talhouni, however, sees the real opportunity for startups in integrating AI into day-to-day business operations rather than in large-scale AI infrastructure.
“Rather than investing in AI infrastructure/LLMs (large language models) etc., startups will incorporate AI into their normal course of business naturally across the region,” he said. “AI will become embedded in the offerings of all startups,” but he does not expect many companies in the region to invest deeply in large-scale AI or deeptech, except for specific use cases.
Talhouni emphasized that AI will likely serve as an enabling technology, integrated into existing business models, rather than being the primary focus for most startups.
Shifting focus
Singhvi anticipates a shift in investor attention toward enterprise systems as Saudi companies scale up and strive for global competitiveness. He highlighted that enterprise software will play a pivotal role in the Kingdom’s broader digital transformation efforts.
“We are seeing more and more SaaS (Software as a Service) companies emerge from the region and the Kingdom,” Talhouni observed. However, scaling such businesses can be challenging, given the relatively small number of large companies in the region. “SaaS/Enterprise requires a large number of firms and a relatively large economy to flourish,” he said. Despite these hurdles, Talhouni noted that niche opportunities exist for creating regional champions in the sector.
Why not oil and gas?
While the oil and gas sector has traditionally been the cornerstone of Saudi Arabia’s economy, it poses significant challenges for startups. Singhvi explained that the sector’s complex regulations and high capital requirements create barriers to entry for smaller companies. Established industry giants dominate research and development, making it tough for new players to break into the space.
“The oil and gas sector’s complex regulations and high capital requirements create significant barriers for startups,” Singhvi said.
However, Singhvi noted the growing opportunities for energy-tech startups, particularly those focused on digital transformation and sustainability, through partnerships with oil and gas companies.
“There has been a rise in strategic collaborations between oil and gas companies and energy-tech startups, which is accelerating the shift toward digital innovation,” he said.
Talhouni offered a broader perspective, suggesting that much of the innovation in the oil and gas sector requires specialized research and development infrastructure, which the region still lacks.
“Most innovation in the oil and gas sector is in engineering, material science, and deeptech,” he explained, adding that these fields require strong research-driven universities and a grant system, which are not yet widespread in the region.
“Unlike consumer internet startups that require, as an example of the opposite side of the spectrum, much easier entry with existing cloud infrastructure and limited technical/research-driven processes required,” he added.
This, he believes, makes it harder for new startups to break into the oil and gas industry, compared to the more accessible fintech sector, where cloud infrastructure allows companies to scale with fewer resources.
The growing SME sector
According to Ibrahim AbdelRahim, managing partner at Moonbase Capital, Saudi Arabia’s SME sector has experienced impressive growth, largely driven by government support and Vision 2030 initiatives.
“As of the fourth quarter of 2023, the number of SMEs in the country reached 1.31 million, reflecting a 3 percent quarter-on-quarter increase,” AbdelRahim noted, referencing a report by the General Authority for Small and Medium Enterprises.
This marks a staggering 179 percent increase in SME numbers over the last eight years. While most of these SMEs are micro-sized, they are well-positioned for further growth.
AbdelRahim also highlighted the rising interest in search funds, a new asset class in the region that aligns well with Saudi Arabia’s economic landscape.
“Many investors are eager to diversify their portfolios with search funds due to their potential for steady returns that surpass those of real estate investments or forex trading,” he said.
Moonbase Capital, one of the pioneers in search funds in the region, has seen growing interest from high-net-worth individuals and family offices in Saudi Arabia.
From an entrepreneurial perspective, AbdelRahim believes search fund-backed ventures will thrive in the coming decade, thanks to the rapid growth and transformation of the SME sector.
