SAUDI ARABIA.  Saudi-based Falcom Financial Services,  a Shariah compliant investment bank that promises intelligent investment ideas, has launched the first 'wealthy investors watch'.

The report presents a rich insight into the habits and practices of wealthy Saudi investors and the investment choices they made at certain points in time. The report looks into their stock picks as well as their portfolios .

The investemnt watch is  a "novel approach by the Falcom research team to understand what fuels their investment spirit and to read in to the decision making das boards of these bold captains of wealth management and see how they charted their investment destiny,” the bank said in a statement.

It answers questions such as: How did the wealthy investors strategise during these times? Did they flee the markets in time to avoid major losses?

The report also reviews the rankings of the wealthiest investors in the Saudi domestic market.

“The report makes for a fascinating reading …it makes the reader  think strategically about his own portfolios ….and helps in shaping his investment point of view,” the Falcom statement said. 

“ It acts as barometer for an investor seeking to read the minds of the wise and wealthy experts.”

Falcom is designed to deliver upscale investment banking and wealth management solutions its ambition is to compete globally.

The bank has its corporate office based in Riyadh. It has eight investment centers in the Kingdom. Oman is operational as we speak and the bank has been licensed to operate in Egypt.

The 10 big highlights from the Falcom Wealthy investors watch 2009

1) 275 investors have crossed the 5% limit set by the Saudi Stock market (Tadawul) to feature in this study across 135 listed companies. However by 30th September, 18 investors had sold their holdings and fell out of the final list.

2)Public Investment Fund (PIF) is the largest investor in the Tadawul with a portfolio size of  SAR 281.4 billion at the end of the third quarter.

3)Top 10 investors in the Saudi Stock Market (Tadawul) together hold SAR 543.6 billion worth of shares accounting for 44% of the total market capitalization of SAR 1.2 trillion on 30th September 2009.

4) The Government dominates the market with SAR 411 billion, or more than 34% of the entire market- PIF, GOSI, Public Pension Agency and SAMA increased  their stakes in a market downturn.

Their action sends a very positive signal to the common investor. This is a better way to signal commitment to the capital markets than to simply buy the loss making portfolios of investors and park them with the Government until markets recover.

5) Sulaiman Abdulaziz Saleh Al Rajhi was the biggest individual investor and moved ahead of Prince Alwaleed Bin Talal Al Saud in the last six months.

6 ) The ranking of Prince Alwaleed Bin Talal Al Saud slipped in the past 6 months despite his holding rising in Kingdom Holding Company from 94% to 95% as the stock underperformed in comparaison with the overall market. Against an increase of 34.4% in the market benchmark over past 6 months, Kingdom Holding Company gained 22.4%.

7) The Top 10 investors do not shuffle their portfolios frequently. Notably, they have taken advantage of beaten down market conditions to raise their holdings.

8 ) There are only two occasions where their holdings have dropped; once when General Organization for Social Insurance (GOSI) reduced its stake in Industrialization Company (NIC) slightly from 5.8% to 5.5% during first quarter and on another occasion Public Pension Agency reduced it’s holding in Pharmaceutical Company (SPIMACO) from 20% to 13%.

9) Conservative approach by the investors early but strategic moves to gain ground “ a wait and watch approach “  Only three among top 10 investors raised their stakes in the first quarter 2009- GOSI, Public Pension Agency and Saleh Abdulaziz Saleh Al Rajhi. Comparatively in the next  six months when market started to move up, as many as six investors took advantage of low prices to increase their holdings.

10 ) Investors are staying the course, “ long term play “
The study shows wealthy investors have mostly maintained their shareholding. But there are incidents of
them increasing the stake in down market or even sell it. For its size of SAR 281.4 billion, Public Investment Fund (PIF) has a focused approach to portfolio management with investments in only 18 companies. GOSI has invested SAR 72.9 billion in 30 companies.

The way the research was conducted

Falcom Research looked at investments of wealthy investors at the end of three of the last four quarters
– 31 December 2008, 31 March 2009 and 30 September 

Tadawul announces the changes in the holdings of those who have invested 5% or more in every
company on a daily basis.

The study is entirely dependent on the data released by Tadawul. Other mega investors who just fall short of the 5% threshold are not part of this study for obvious lack of data although they might also be influential players in the market. 

Investors were segregated  under different categories – Government and its agencies, Individuals and Corporate. Investors resembling groups of associates were put under Corporate category along with any companies investing in the market.

Similarly, the data was collected for issued shares for all the companies. Falcom Research then calculated the value of shares held across companies for every investor. This data was then sorted to assign rankings.

The original data is available in Arabic. Falcom regrets any errors in translation despite best efforts

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