SAMA Foreign Holdings (Saudi Arabia)
What Is SAMA Foreign Holdings?
SAMA Foreign Holdings is a sovereign wealth fund (SWF) controlled by the Saudi Arabian Monetary Agency (SAMA), which is a part of the Central Bank of Saudi Arabia. The elements of the SAMA incorporate giving national currency, the Saudi Riyal, overseeing commercial banks, overseeing foreign exchange reserves, advancing price and exchange rate stability, and shielding the growth and adequacy of the Saudi financial system.
How Does SAMA Foreign Holdings Work?
The SAMA Foreign Holdings fund is included principally of wealth from Saudi Arabia's oil-related companies, however a portion of its value comes from dealing with certain Saudi public pensions. The foreign holdings of the SAMA form one of the largest pools of savings of any country in the world. As per the Sovereign Wealth Fund Institute, SAMA Foreign Holdings is the world's fifth-largest SWF, with a net worth of $490 billion in assets under management (AUM) as of June 2022.
SAMA Foreign Holdings: Background
As the largest crude oil exporter in the world, the Kingdom of Saudi Arabia is the main oil producer with huge spare capacity. These reserves have been managed really and wisely by the SAMA Foreign Holdings fund since its beginning in 1952, and they have thrived under the fund's recent governorship. Portions of the fund are invested internally to support the general budget, while overflows are invested remotely in semi-ensured government bonds.
The SAMA is a careful investor and the majority of its portfolio is believed to be held in low-yielding, okay fixed-income investments, for example, sovereign debt instruments and United States bonds, albeit a few foreign holdings are allocated to stocks to upgrade returns.
SAMA Foreign Holdings: Strategy
As with other SWFs, the SAMA Foreign Holdings fund is generally secretive about its specific holdings and internal operations. Notwithstanding, we realize that a large part of its strategy is to keep a culture that is recognized by a high degree of market shrewd, global awareness, and technical skill. Thusly, and to safeguard its resources, SAMA made a risk and compliance department with the accompanying mandates:
- Relieve risks that could influence SAMA's ability to accomplish its objectives by means of an extensive systematic risk-management methodology that is viable with international best practices and norms
- Raise SAMA's social profile by imparting regulations, directions, and codes of conduct to improve SAMA's reputation and credibility, and to establish an ideal workplace that advances lucidity and transparency
- Accomplish SAMA's strategic and operational objectives by answering a wide range of risks and incidents, while protecting the continuity of SAMA's critical exercises
- Convey really among SAMA's different levels of management to go with the right choices, and to oversee risks, incidents, and emergencies as soon a possible
SAMA Foreign Holdings: Long-Term Vision
As its tremendous SWF assets demonstrate, it is no secret that Saudi Arabia's economy is prospering, that it stays appealing to foreign capital, and that it appreciates proceeded with investor confidence. In that capacity, SAMA's management is committed to building upon what has worked. The SAMA Foreign Holdings fund will keep on investing in okay assets going ahead, and it keeps on imagining huge high-growth returns over the long term.
