10 Hrs
Source:
الاقتصادية
Saudi cash funds exceed 15.5 billion riyals over investment cap
The Saudi Capital Market Authority has reimposed a maximum limit on foreign investment in money market funds, set at 5% of total net assets, with the aim of reducing outbound liquidity. It is estimated that the assets of these funds currently amount to approximately 133 billion SAR, representing a 73% increase since the beginning of the year. There remains a compliance gap of around 15.5 billion SAR to align with the new rule. Funds with foreign investment exceeding 20% are required to reduce their foreign holdings within six months. This can be achieved through growth in local assets, not renewing external investments, or adding new local subscriptions. The decision has a significant impact on the debt market, with the compliance gap estimated to account for half of the trading volume in sukuk and bonds during 2025. This could accelerate the demand for local debt instruments, enhance liquidity in the secondary market, and support the rapid growth of money market funds, which have increased by 335% since the end of 2023. The impact of this directive ranges from rearranging portfolios and directing new fund flows, with the ultimate goal of reducing dependence on foreign investments and increasing demand for local debt instruments.
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