1. Chairman, The Investor for Securities Co.
International Capital Flows Saudi Arabia as destination and source of capital for asset management
Abdullah M. Alfouzan
Chairman, The Investor for Securities Co.
Riyadh, Saudi Arabia
3 April 2014

2. Saudi Arabia, a destination for global capital
Approaching $1 trillion GDP
Consistent positive GDP growth
Gross national savings among highest in the world
Highly urbanized, young population
$717 billion foreign currency reserves
> $120 billion inward Foreign Direct Investment,
An ancient culture, but also thoroughly modern
2011
2012
2013
GDP
8.6%
5.1%
3.6%
BASIC DATA
Population
27 million
% population 0-24 years
47%
Urbanization
82%
GDP per capita
$31,300
Daily value of crude exports
> $650 million
The Investor for Securities Co.

3. Saudi capital markets, young and growing
Capital Market Law, 2003
Capital Market Authority (CMA), 2005
CMA enforces a clear line between banking & investments
Tadawul, national stock market,
> $510 billion total market capitalization
More than 11 million investors, 159 traded companies, growing sukuk market
Tadawul up:
11% YTD,
33% YoY (31 March 2014)
The Investor for Securities Co.

4. Saudi financial intermediaries
83 active CMA-licensed investment companies
10 linked to domestic Saudi banks
19 to foreign banks
13 to foreign investment companies
> 30 Saudi investment companies are fully independent & local
Top foreign names in Saudi Arabia: JP Morgan, Merrill Lynch, BNP Paribas, Credit Suisse, HSBC, Deutsche Bank, KKR, Lazard
Top domestic names: The Investor, Falcom, Jadwa, Alkhabeer
Core businesses: Investment banking, brokerage, asset management
256 mutual funds, > $27 billion AUM
The Investor for Securities Co.

5. Inward investments into Saudi Arabia
Market preparing for King Abdullah’s signature, replace existing swap arrangement
Draft legislation prepared, awaiting only final royal approval
CMA chairman wants short delay, time for upgrading market systems
At one point SAMBA’s Saif Saudi fund was largest country fund in the world
Portfolio rebalancing, eventual inclusion in MSCI, creates demand
Some analysts predict up to $10 billion foreign investor demand for Tadawul listings (up to 20% of market cap)
Key drivers: Industry & Real Estate
The Investor for Securities Co.

6. Next step, global investment in Saudi real estate
Currently restricted, no foreign investment in Saudi real estate sector
Exceptions: GCC nationals, some expatriate and international investors
Large middle class, purchasing power in SAR 500,000 to SAR 1 million range
Housing demand today: Over 300,000 new units required
Total Saudi construction spending was > $225 billion
Expected yields of 25% IRR or more in almost any sector, any region of Saudi real estate
“With its young and expanding population, Saudi Arabia should remain the most buoyant [real estate] market, in line with its overall economic development plan….the recent approval of the mortgage law should help to drive growth in residential construction in response to the current housing shortage”
President MENA, BofA Merrill Lynch
The Investor for Securities Co.

7. Saudi Arabia, a source for global capital
Global demand for Islamic investments, > $3 trillion
Existing $3.5 trillion AUM owned by Muslims, almost none sharia compliant
Estimated $200 billion under management in Switzerland owned by Saudis
Most Muslims live a sharia life, want sharia-compliant investing
King Abdullah Financial City
Safa Investment Services: the world’s first global Islamic asset manager
Collaboration between Swiss and Saudi units of The Investor for Securities Co.
Professional team of asset managers, growing client base
The Investor for Securities Co.

8. Safa balanced portfolio allocation
Global asset allocation
Fully diversified across all asset categories
Fully diversified within each category
100% liquid, can be redeemed at any time
Robust portfolio construction, fully optimized
All assets meet global professional standards for size, track record, liquidity
Fully sharia compliant
Source data: Bloomberg
The Investor for Securities Co.

9. The Investor for Securities Co.
Safa portfolios
Islamic asset allocations:
above-market performance
lower risk metrics
Portfolio Statistics
Safa conservative
Safa
balanced
growth
(6 Years)
Return 
Total return
30.90%
36.38%
37.44%
Annualized total return
4.53%
5.23%
5.37%
Risk
Standard deviation (annualized)
5.20%
10.71%
13.88%
Source data: Bloomberg
Past performance is not a reliable indicator of future results. Performance data is calculated NAV to NAV, and does not take account of commissions and costs incurred on the issue and redemption of units.
The Investor for Securities Co.

10. The Investor for Securities Co.
Key player in Saudi capital markets
Founded 2007, SAR 200 million paid-in capital
Profits 2013, > SAR 82 million
> 50 professional staff
> SAR 10 billion AUM (CHF 2.5 billion)
Strong presence in Saudi equity markets, private placements and real estate
The Investor for Securities Co.

11. The Investor for Securities Co.
Conclusion
Capital flows from and to Saudi Arabia will continue to be important
Increasingly sophisticated investors & businesses
Saudi Arabia is a major destination for investors in emerging markets
Foreign direct investment, particularly in future Saudi real estate funds
Portfolio investment in the Saudi stock and sukuk markets, Tadawul
Foreign bankers are welcome, but only with CMA regulatory approvals
Our new Safa Investment Services will capture an important part of global Saudi portfolio investments
The Investor for Securities Co. is ideally placed for both inward and outward Saudi investments
The Investor for Securities Co.

12. The Investor for Securities Co.
Thank you.
Abdullah M. Alfouzan Chairman The Investor for Securities Co. Aljumaiah Center, King Fahd Road P.O. Box Riyadh Saudi Arabia Telephone: x Website:
Abdullah M. Alfouzan Chairman Islamic Wealth & Asset Management S.A. 11, rue Verdaine 1204 Geneva Switzerland Telephone: Website:
The Investor for Securities Co.