Saudi investors head for the exit

by Reuters Tuesday, 06 February 2007

About 117,000 investors bailed out of Saudi mutual funds in the six months to September last year as a bourse crash slashed the value of the industry's assets under management by 26.5 percent, central bank data showed.

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Figures published on Tuesday by the Saudi Arabian Monetary Agency (SAMA) showed the number of investors in mutual funds fell 17.7 percent from the first quarter or about 117,620.
While the number of funds had risen by eight to 212 at the end of September, the value of their assets fell 27 percent from the end of March to 100.7 billion riyals ($26.85 billion).

For funds investing in domestic assets the decline was even sharper at 32.6 percent, according to the figures.

The largest Arab bourse lost more than half its value last year in a crash that began in February last year.

Several analysts have said they expected the bourse crash to promote mutual funds as a safer alternative for most of the kingdom's investors, estimated at more than 3 million.

Abdulhamid al-Amri, a member of the Saudi Economic Association and analyst on mutual funds, said preliminary figures showed 203,000 investors pulled out of investment funds in the nine months to December.

"It will take a long time, probably two years, before we see the numbers rising again. The losses were massive for some," he told Reuters.



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