PIF Provides Private Sector with $25.6 Bn Investment Opportunities

The value of private sector investments in portfolio companies and projects affiliated with the Public Investment Fund (PIF) amounted to $25.6 billion as of Q3 2023, announced Governor Yasser al-Rumayyan.
Rumayyan was speaking at the second edition of the PIF Private Sector Forum, which began on Tuesday at the King Abdulaziz International Convention Center in Riyadh, aiming to strengthen partnerships and showcase opportunities for local cooperation in strategic sectors.
He stressed the importance of the Forum and the opportunities it provides to enhance cooperation with the private sector in achieving PIF strategic objectives.
He added that PIF continues to work as an engine for economic transformation in Saudi Arabia through the development of strategic sectors and the involvement of the private sector through initiatives that enhance its role as an investor, partner, and supplier.
He pointed to the role of the Public Investment Fund in supporting Vision 2030 goals, which aims to raise the private sector's contribution to GDP to 65%.
PIF has provided significant investment opportunities, and the value of private sector investments in portfolio companies and projects affiliated with PIF amounted to $25.6 billion as of the third quarter of 2023.
Meanwhile, the Head of the National Development Division at PIF, Jerry Todd, stated that achieving prosperity in the private sector is one of the essential goals of Vision 2030 and a key enabler for the Kingdom's economic transformation.
Todd stressed that PIF and its portfolio companies continue their commitment to support and enhance the private sector's growth.
In the first session, entitled "The Role of the Private Sector in Realizing Vision 2030," a panel of ministers discussed the importance of partnering with the private sector as an investor, operating partner, and supplier.
- Reaching 1Mn visitors
Saudi Minister of Tourism Ahmed al-Khateeb revealed that the sector in the Kingdom achieved the goal of 100 million tourists during 2023, with 77 million local visitors and 27 million foreign tourists, who spent $26.6 billion.
Khateeb announced that the new strategy of Crown Prince and Prime Minister Mohammed bin Salman for Vision 2030 targets attracting 150 million tourists, including 80 million from within the Kingdom and 70 million from abroad.
He explained that the state committed to funding training programs, as more than 100,000 young men and women were trained annually, including 15,000 who joined the best global institutes to enter the tourism sector.
He said the Tourism Development Fund has financed over 50 projects worth SR35 billion since its establishment.
- National Academy of Vehicles
In the same dialogue session, Minister of Industry and Mineral Resources Bandar al-Khorayef launched the first National Academy of Vehicles and Cars to develop capabilities in the electric vehicles industry.
Khorayef also announced the establishment of a new Automotive Manufacturers Association to boost the growth of the industrial sector.
Through the Association of Automotive Manufacturers and National Supply Chains, the Ministry also aims to raise awareness among local communities about the automotive industry sector and build human capabilities in manufacturing and maintaining cars with a high-tech ecosystem.
The Minister asserted that the Association and the Academy would help increase the contribution of significant projects in maximizing the benefit of local content and increasing imports.
From 2020 to 2022, the Kingdom's imports saw a 38 percent increase, while imports of products listed as mandatory during the same period were approximately 15 percent.
Moreover, the number of factories producing mandatory list products has reached 1,437 in three years.
Khorayef indicated that investments would accelerate growth by applying contemporary technologies and providing attractive job prospects, suggesting that the Kingdom will eventually become a technology exporter.
He referred to the Fund's role in launching the automobile industry in Saudi Arabia and bringing a larger number of international companies into the industry and its associated supply chains.
- Shipbuilding industry
For his part, Minister of Investment Khalid al-Falih stated that the private sector is the main focus of economic diversification, which is the main focus of Vision 2030 executive and strategic programs.
Falih added during his participation in the panel that the economy is expected to grow from $693 billion to $1.7 trillion, equivalent to four times the private sector's contribution.
The Kingdom plans to launch the "Investor Confidence Index," which measures investor confidence levels biannually to provide insights into challenges and requirements for the private sector to grow, said Falih.
He also highlighted the Kingdom's stable legislative, regulatory, and legal environment, which fosters favorable and sustainable private sector development.
The Minister added that the world's shipbuilding industry will be in China, South Korea, Saudi Arabia, and Russia in the coming decades.
He described the project as "pivotal," saying it is led by Crown Prince Mohammed bin Salman to build an integrated industry.
- Financing Contractors
The Public Investment Fund, in partnership with the National Infrastructure Fund, launched the "Contractor Financing Program," aimed at mitigating risks in construction sector investments. It also seeks to strengthen the construction sector, promote a more integrated and transparent construction ecosystem, and enhance project structures.
Meanwhile, Emir of Aseer Prince Turki bin Talal bin Abdulaziz unveiled at the Forum the operations of Asser Investment Company to transform the region into the number one tourist destination in the Kingdom.
Furthermore, the General Real Estate Authority signed a memorandum of understanding (MoU) with the Public Investment Fund, aiming to empower the real estate market in the Kingdom.
The MoU enhances the role of technology and data, talent development, and regulatory policies in a way that contributes to developing the sector in the country.
The MoU includes enhancing technology and innovation by enabling four main centers that seek to position the Kingdom as a center for real estate technology.
- Local content
The first day of the Forum witnessed the presentation of the Musahama Award for the private sector, where five national companies were selected for their positive contribution to local content in their work with PIF portfolio companies, including al-Ayuni Investment and Contracting Company, Alfanar Group, Cisco, Ericsson, and Riyadh Cables Group Company.
Last year, the Public Investment Fund launched the Private Sector Forum as a comprehensive site for private sector companies to deal with the Fund and its portfolio companies in priority sectors.
The platform provided over 200 opportunities last year, with a value exceeding $5.3 billion.
The Fund established the National Development Division to enhance the participation of the private sector in its projects and portfolio companies.
Since 2017, the Fund has established 93 companies and created more than 644,000 direct and indirect jobs in various promising strategic sectors.
The Forum is the largest event of its kind for the private sector in the Kingdom and is attended by more than 8,000 participants.
The first day's sessions witnessed the presence of several ministers, senior officials, government agencies, and 80 representatives of the Fund's portfolio companies, with more than 100 pavilions.

President Vladimir Putin’s remarks on Tuesday about revising Russia’s nuclear doctrine triggered immediate reactions in global financial markets, as investors rushed to safe haven assets.

Putin issued a warning to the US lowering the threshold for a nuclear strike after the administration of Joe Biden reportedly allowed Ukraine to fire American-made long-range missiles deep into Russia.

The Russian President’s warnings sent markets to extreme volatility.

In this context, global stocks sharply fell while gold prices and the Japanese yen climbed amid rising geopolitical tensions between Ukraine and Russia.

Kremlin spokesperson Dmitry Peskov said Tuesday, “The Russian Federation reserves the right to use nuclear weapons in the event of aggression against it or the Republic of Belarus, ... with the use of conventional weapons, in a way that poses a critical threat to their sovereignty and (or) territorial integrity.”

The spokesperson further said that Russia would view the use of Western non-nuclear missiles by Ukraine as an attack by a non-nuclear state with the support of a nuclear state against the country, potentially justifying the use of nuclear weapons by Moscow, according to NBC news.

Rise of safe-haven assets

Global stocks briefly fell and investors fled to safe-haven assets on Tuesday, as global markets reacted to escalating tensions between the world's two largest nuclear powers: Russia and the US.

Investors rushed to safe-haven assets including gold and the Japanese yen.

Wall Street’s fear index, the Chicago Board Options Exchange’s CBOE Volatility Index, jumped to 17,88, its highest level since the November 5 US elections. It then fell to 16.61.

The Dow Jones Industrial Average shed 327 points, or 0.7%. The S&P 500 and Nasdaq Composite lost 0.5% each. Treasurys increased as investors moved into the safe haven, driving yields lower.

Europe's main stock index touched its lowest level in three months on Tuesday, spurring investors to head to safer havens.

The pan-European STOXX 600 closed 0.9% lower, after logging a third straight day of losses.

Metals and currencies under pressure

Meanwhile, base metals prices came under pressure on Tuesday as some investors chose safe-haven assets due to signs of escalating tensions between Russia and the United States over Ukraine.

Three-month copper on the London Metal Exchange (LME) fell 0.3% to $9,042 per metric ton in official open-outcry trading. Spot gold prices rose by about 1%.

Meanwhile, LME aluminium prices were stable at $2,607 in official activity as the market digested China's plan to remove a tax refund on exports of some aluminium products.

Lead lost 0.4% to $1,983 due to the second day of a significant inflow of the metal to the LME-registered warehouses in Singapore.

Zinc fell 0.1% to $2,947.5, tin eased 0.4% to $28,900 and nickel rose 1.2% to $15,915.

In currency markets, the Japanese yen rose 0.7% and 0.36% against the euro and US dollar respectively.

“Typical risk-off move in forex following the headline,” said Athanasios Vamvakidis, global head of forex strategy at Bofa, referring to the reaction to the Kremlin statement.

“The market has been complacent on geopolitical risks, focusing on other themes,” he added. “Positioning has been a long risk, getting even more stretched after the US elections.”

In return, crude oil futures were down slightly. A barrel of West Texas Intermediate, scheduled for delivery in December, fell 0.53% to $68.79.

Meanwhile, the price of a barrel of Brent, scheduled for delivery in January, fell 0.38% to $73.02.

PIF Provides Private Sector with $25.6 Bn Investment Opportunities