Logo of the Public Pension Agency
Saudi Arabia’s Public Pension Agency (PPA) published its annual investment report for 2020, which included realizing a rate of return on its investments of 9.5%.
The average annual return on investments for 2017-2020 was 7.9%.
The report showed the distribution of the PPA’s investments locally and internationally, where developed market stocks came first with 29.4%, followed by Arabian Gulf bonds with 20%.
PPA manages its investments through long-term policies, which contribute to achieving robust returns on investment within acceptable levels of risk, maintain and raise the real value of assets.
Among the most important investment policies adopted by the PPA is the policy of distributing assets between diverse investment tools, geographical regions, and currencies in a manner that reduces the overall risks of its investment portfolio.
PPA focuses on local investments as much as possible, it noted.
The Saudi agency also adopts conservative investment policies with calculated risks, and does not invest in prohibited activities. It takes into account that there is sufficient liquidity to meet all obligations when due, and to finance promising investment opportunities.
On a regular basis, PPA prepares a study of the strategic distribution of assets, in order to keep pace with investment developments in the financial markets and future expectations, and to achieve the best returns within an appropriate level of risk.
This study determines the target weights of asset classes, and the extent of investment vehicles’ diversity.
Al Ra'idah Investment Co. (RIC) – the PPA’s investment arm – is managing the agency’s investments according to certain policies, and in line with the applied international practices in the field of pension fund management. Raza, the PPA’s real estate management arm and RIC subsidiary, manages the real estate assets of the agency.
The following table shows the PPA’s local and international investments by the end of 2020:
|
PPA’s Investments by Sector |
|||
|
Investment Type |
2019 |
2020 |
Variation % |
|
Developed Market Stocks |
24.8% |
29.4% |
+4.6% |
|
Arabian Gulf Bonds |
14.3% |
20.0% |
+5.7% |
|
Saudi Stocks |
20.0% |
18.3% |
(1.7%) |
|
Cash and Cash Investments |
10.0% |
8.4% |
(1.6%) |
|
Local Real Estate |
6.2% |
6.0% |
(0.2%) |
|
Miscellaneous Strategic Investments |
5.9% |
5.3% |
(0.6%) |
|
Emerging Market Stocks |
4.3% |
5.0% |
+0.7% |
|
Emerging Market Bonds |
4.4% |
4.8% |
+0.4% |
|
Private Equity |
2.5% |
1.9% |
(0.6%) |
|
US Bonds |
3.1% |
0.6% |
(2.5%) |
|
International Real Estate Funds |
0.4% |
0.3% |
(0.1%) |
|
International Bonds |
4.2% |
-- |
(4.2%) |
Last year, PPA invested in 77 Tadawul-listed firms, four real estate funds and 18 unlisted companies.
The following table shows the PPA’s investments in listed and unlisted local companies in 2019, in addition to the ownership’s variation rate in 2020:
|
PPA’s Investments by Sector & Company |
|||||
|
Sector |
Company |
Stake in 2019 |
Stake in 2020 |
Variation |
|
|
Banks |
1 |
SAIB |
18.57% |
18.95% |
+0.38% |
|
2 |
Samba |
14.95 % |
14.80 % |
(0.15%) |
|
|
3 |
BSF |
2.85 % |
7.24 % |
+4.39% |
|
|
4 |
Riyad Bank |
7.20 % |
6.05 % |
(1.15%) |
|
|
5 |
NCB |
8.64 % |
6.04 % |
(2.60%) |
|
|
6 |
Al Rajhi Bank |
3.85 % |
3.92 % |
+0.07% |
|
|
7 |
SABB |
1.26 % |
1.11 % |
(0.15%) |
|
|
8 |
ANB |
0.51 % |
0.42 % |
(0.09%) |
|
|
9 |
Bank Aljazira |
0.25 % |
0.13 % |
(0.12%) |
|
|
Capital Goods |
10 |
Saudi Ceramic |
6.77 % |
5.73 % |
(1.04%) |
|
11 |
SVCP |
8.07 % |
4.16 % |
(3.91%) |
|
|
Telecom |
12 |
Mobily |
4.27 % |
3.43 % |
(0.84%) |
|
13 |
stc |
5.57 % |
3.32 % |
(2.25%) |
|
|
REITs |
14 |
Taleem REIT |
4.15 % |
5.52 % |
+1.37% |
|
15 |
Derayah REIT |
4.30 % |
3.00 % |
(1.30%) |
|
|
16 |
Jadwa REIT AlHaramain |
0.34 % |
0.34 % |
-- |
|
|
Real Estate Management & Development |
17 |
ARDCO |
8.37 % |
9.58 % |
+1.21 % |
|
18 |
Makkah Construction |
7.44 % |
7.44 % |
-- |
|
|
19 |
Alandalus Property |
0.97 % |
6.65 % |
+ 5.68 % |
|
|
20 |
Taiba |
4.54 % |
4.81 % |
+ 0.27 % |
|
|
Basic Materials |
21 |
Petrochem |
17.74 % |
17.82 % |
+0.08% |
|
22 |
SIIG |
13.24 % |
13.94 % |
+ 0.70 % |
|
|
23 |
BCI |
9.18 % |
9.73 % |
+ 0.55 % |
|
|
24 |
SABIC Agri-Nutrients |
7.55% |
7.83% |
+ 0.28 % |
|
|
25 |
Aslak |
6.03 % |
7.74 % |
+ 1.71 % |
|
|
26 |
Sipchem |
7.20 % |
7.20 % |
-- |
|
|
27 |
Eastern Cement |
10.66 % |
6.06 % |
(4.60%) |
|
|
28 |
Yansab |
2.55 % |
4.88 % |
+ 2.33 % |
|
|
29 |
Yamama Cement |
6.88 % |
4.84 % |
(2.04%) |
|
|
30 |
Tasnee |
4.21 % |
4.21 % |
-- |
|
|
31 |
Zamil Industrial |
5.29 % |
4.11 % |
(1.18%) |
|
|
32 |
Qassim Cement |
6.19 % |
3.65 % |
(2.54%) |
|
|
33 |
Saudi Cement |
6.11 % |
3.54 % |
(2.57%) |
|
|
34 |
SABIC |
3.38 % |
3.43 % |
+0.05% |
|
|
35 |
Southern Cement |
4.59 % |
3.39 % |
(1.20%) |
|
|
36 |
Arabian Cement |
5.27 % |
2.20 % |
(3.07%) |
|
|
37 |
Advanced |
1.50 % |
1.74 % |
+ 0.24 % |
|
|
Energy |
38 |
Saudi Aramco |
0.05 % |
0.05 % |
-- |
|
Retailing |
39 |
Baazeem |
1.92 % |
3.71 % |
+1.79% |
|
40 |
SACO |
2.53 % |
2.75 % |
+0.22% |
|
|
41 |
Jarir |
0.48 % |
0.93 % |
+0.45% |
|
|
Public Utilities |
42 |
GASCO |
4.38 % |
2.11 % |
(2.27%) |
|
Insurance |
43 |
Tawuniya |
21.81 % |
20.45 % |
(1.36%) |
|
44 |
Walaa |
3.66 % |
3.52 % |
(0.14%) |
|
|
45 |
Bupa Arabia |
0.34 % |
3.38 % |
+3.04 % |
|
|
46 |
Arabian Shield |
4.65 % |
3.01 % |
(1.64%) |
|
|
Healthcare |
47 |
Mouwasat |
0.58 % |
4.11 % |
+ 3.53 % |
|
48 |
Saudi German Hospital |
1.13 % |
1.41 % |
+ 0.28 % |
|
|
Pharma |
49 |
SPIMACO |
13.06 % |
13.06 % |
-- |
|
Durables |
50 |
Thob Al Aseel |
1.18 % |
1.38 % |
+ 0.20 % |
|
Consumer Services |
51 |
Herfy |
0.61 % |
9.88 % |
+ 9.27 % |
|
52 |
Ataa Educational |
6.08 % |
9.70 % |
+ 3.62 % |
|
|
53 |
Dur |
1.74 % |
1.74 % |
-- |
|
|
54 |
Seera |
3.17 % |
1.68 % |
(1.49%) |
|
|
Food Retailing |
55 |
Al Othaim |
0.84 % |
2.65 % |
+ 1.81 % |
|
Food Production |
56 |
Savola |
2.31 % |
9.26 % |
+ 6.95 % |
|
57 |
SADAFCO |
1.96 % |
2.34 % |
+ 0.38 % |
|
|
58 |
Almarai |
0.37 % |
0.40 % |
+ 0.03 % |
|
|
59 |
Al-Jouf Agriculture |
9.23 % |
9.83 % |
+ 0.6 % |
|
|
Unlisted companies |
60 |
Raidah Investment |
100.00 % |
100.00 % |
-- |
|
61 |
Raysan Arabian Real Estate Development |
32.57 % |
66.52 % |
+ 33.95 % |
|
|
62 |
Cooperative Real Estate Investment Company (CREIC) |
50.00 % |
50.00 % |
-- |
|
|
63 |
Mina Real Estate |
50.00 % |
50.00 % |
-- |
|
|
64 |
Tadawul Real Estate |
40.00 % |
33.40 % |
(6.6%) |
|
|
65 |
Dar Al Tamleek |
27.90 % |
27.90 % |
-- |
|
|
66 |
Al Safwa Cement |
25.00 % |
25.00 % |
-- |
|
|
67 |
ASMA Capital |
20.00 % |
20.00 % |
-- |
|
|
68 |
Umm Al Qura Development & Construction |
17.20 % |
17.20 % |
-- |
|
|
69 |
Arriyadh Holding |
16.67 % |
16.67 % |
-- |
|
|
70 |
Jubail United Petrochemical |
15.00 % |
15.00 % |
-- |
|
|
71 |
Ewaan Real Estate |
12.50 % |
12.50 % |
-- |
|
|
72 |
Al Asyah |
10.00 % |
10.00 % |
-- |
|
|
73 |
Integrated Telecom |
5.00 % |
5.00 % |
-- |
|
|
74 |
National Co. for Tourism |
2.84 % |
2.84 % |
-- |
|
|
75 |
Saudi Industries Development Co. (Tatweer) |
1.50 % |
1.50 % |
-- |
|
In 2020, the PPA invested in 18 new listed companies across 12 sectors, and two unlisted firms, as the following table shows:
|
PPA’s New Investments in 2020 |
||
|
Sector |
Company |
Stake (%) |
|
Banks |
Bank Albilad |
0.05 % |
|
Capital Goods |
Al-Babtain |
9.90 % |
|
REITs |
Jadwa REIT Saudi |
0.20 % |
|
Basic Materials |
Alujain |
0.13 % |
|
Energy |
Bahri |
0.06 % |
|
Retailing |
Shaker |
4.78 % |
|
eXtra |
0.63 % |
|
|
Insurance |
Malath |
1.22 % |
|
Al Rajhi Takaful |
1.20 % |
|
|
AXA Cooperative |
0.48 % |
|
|
Healthcare |
Sulaiman Al Habib Group |
2.08 % |
|
Care |
0.76 % |
|
|
Consumer Services |
NCLE |
6.30 % |
|
Leejam Sports |
1.25 % |
|
|
Food Production |
NADEC |
0.32 % |
|
Commercial & Professional Services |
Maharah |
0.47 % |
|
Transport |
Budget Saudi |
3.62 % |
|
SISCO |
2.41 % |
|
|
Unlisted |
Bellevue |
30.00 % |
|
Umm Al Qura Development & Construction |
17.20 % |
|
In 2020, the PPA exited from eight Saudi-listed firms, distributed over five sectors, in addition to three unlisted firms, as the following table shows:
|
PPA’s Divestments in 2020 |
||
|
Sector |
Company |
Stake (%) |
|
Banks |
Alinma Bank |
5.81 % |
|
Energy |
Petro Rabigh |
0.38 % |
|
Real Estate Management & Development |
Al Akaria |
5.92 % |
|
Jabal Omar |
3.16 % |
|
|
Investment & Financing |
Kingdom Holding |
0.15 % |
|
Basic Materials |
Tabuk Cement |
2.40 % |
|
Yanbu Cement |
1.70 % |
|
|
City Cement |
0.81 % |
|
|
Unlisted |
International Diol Co. |
19.13 % |
|
Al Aqeer Development |
7.38 % |
|
|
ACWA Power |
4.81 % |
|
According to data compiled by Argaam, Saudi Arabia’s Cabinet approved, on June 15, to merge the PPA with the General Organization for Social Insurance (GOSI).
Nader bin Abdallah Al-Wahaibi, GOSI’s Assistant Governor for Insurance Affairs, confirmed that the merger decision will not affect the investment strategy, nor the stock exchange.
He added that the merger will comprise transferring some of the ownerships from the PPA to GOSI, indicating that both institutions have a long-term investment strategy with investments in the same companies as well as business activities.
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