Sama is selling financial assets in Europe

The Saudi Arabian Monetary Authority (Sama) is selling financial assets in Europe.

Sama had about $671.8bn in assets under management as of the middle of this year, up from about $29bn in 2004, according to estimates from the Sovereign Wealth Fund Institute.

In accordance to Nasdaq estimates, Sama has withdrawn US$1.3 billion from European equities so far this year.

Michael Maduell, the president of the Sovereign Wealth Fund Institute, commented: “The issue for Sama is liquidity and a level of capital preservation. .. Many SWFs are moving away from equities due to increased volatility in the run-up to expected interest rate hikes, and they might also be moving away from Europe.”

The International Monetary Fund warned last month that Saudi Arabia’s growing budget deficit could rapidly erode its reserves unless it adapts to slumping oil prices by adopting a host of painful reforms.

“With the large decline in oil prices, the fiscal deficit has increased sharply and is likely to remain high over the medium term,” the IMF said in a report released after talks with Saudi officials.

“These deficits will rapidly erode the fiscal buffers that have been built over the past decade,” it said.

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