The Public Investment Fund, Saudi Arabia's sovereign wealth fund, has significantly increased its investments of big-ticket US stocks in the first three months of 2020, a new filing showed.
The $325 billion fund, chaired by Crown Prince Mohammed bin Salman, has accounted for a huge amount of the pandemic-linked stock market sell-off by securing its US holdings in just three months from a total value of $2.1 billion to $9.78 billion.
Significant new positions were an investment of $828 million in BP Plc, and ownership of around $714 million in Boeing.
The Kingdom's sovereign wealth fund disclosed last month that it was searching for an investment opportunity from the financial devastation from the global health crisis. A regulatory filing on Friday divulged how the fund allocated billions of dollars on stocks for the current year.
The $325 billion PIF, which until five years earlier was a holding entity for federal shares in local enterprises, also revealed a $522 million financial stocks in Citigroup Inc., Pfizer, Starbucks and Facebook Inc. Other positions include $496 million on Walt Disney and $488 million on Bank of America Corporation.
The acquisitions, posted with the Securities and Exchange Commission, follow reports in April of positions each worth almost $500 million in cruise line company Carnival Corp. and concert promotions outfit Live Nation Entertainment Inc.
Crown Prince bin Salman, Saudi Arabia's day-to-day ruler, established the sovereign wealth fund in 2015 with the goal of diversifying the Kingdom's economy and steering it away from oil by pumping cash in industries untethered to hydrocarbons.
Stock market analysts stated that the shopping spree of sorts mirrored the bullishness on the part of the sovereign fund that businesses that have been hit hard by the pandemic would bounce back easily, and their stock prices would soar.
The public investment fund looks to have acquired a perception on market prices from a long term vantage point. "We must assume that they purchased when they're down on assumptions they will rise back up," Tarek Fadlallah, Middle East chief executive of Nomura Asset Management, disclosed to Arab News.
In the interest of transparency, a declaration was made with the US stock market regulator and indicated PIF owning stakes valued at around $10 billion in 24 major firms. The largest, valued at more than $2 billion, was an already-disclosed position in taxi app, Uber.
PIF, the cornerstone of the Kingdom's economic advancement strategy, is the biggest benefactor to the Vision Fund after it shelled out some $45 billion to invest with SoftBank founder Masayoshi Son in businesses like Oyo Hotels, WeWork, Marriott Hotels and SunCor Energy, to name a few.