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The Gulf Briefing: swapping petrodollars for assets

In this weekly newsletter, Sebastian Castelier rounds up the biggest stories from the Gulf region.
A general view of Saudi Aramco's Abqaiq oil processing plant on September 20, 2019.

Saudi Arabia’s revenue from oil exports dipped to a seven-month low in September, but the kingdom still tallies almost $900 million a day in petrodollars. Part of this deluge of cash makes its way into the coffers of Gulf sovereign wealth funds as policymakers avoided so far the temptation of increasing public spending. Therefore, Gulf funds have become a go-to source for capital this year as major central banks pivoted to restrictive monetary policy.

Gulf sovereign wealth funds strategy evolved, though. It has shifted from a preference for “portfolio funds” that buy numerous small stakes in a lot of companies to “investing in a more strategic and concentrated way,” said Rachel Ziemba, a macro strategist. Gulf sovereign wealth funds are now hungry for global deals closely aligned with top domestic priorities.

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