Saudi Arabia’s sovereign wealth fund, PIF invested more than USD 7 billion to develop brand-new positions in US stocks involving Amazon.com Inc., Alphabet Inc., BlackRock Inc., and JPMorgan Chase & Co. as markets were pummelled by recession fears.
The USD 620 billion Public Investment Fund also added to positions it carried in Facebook Inc. owner Meta Platforms Inc., PayPal Holdings Inc., and Electronic Arts Inc. in the second quarter, according to a 13F filing. The acquisitions manifests that the PIF is doubling down on its wager on technology investments despite a rout in valuations.
Chaired by HRH Crown Prince Mohammed bin Salman, the Public Investment Fund is investing deeper into public markets as it follows the objective of more than doubling its assets by 2025. The wealth fund is enhancing its investments in equities as Saudi Arabia’s income from oil nearly doubled in the second quarter. Surging crude prices are set to offer the kingdom its first budget surplus in a decade.
The PIF’s very latest purchasing extravaganza resonates the fund’s strategy in early 2020 when it expended billions snapping up stakes in US firms whose valuations had been pummelled by the onset of the coronavirus pandemic. It subsequently sold numerous of those stakes when markets recovered.
Saudi Wealth Fund PIF’s recession fears
The S&P 500 index dropped 16% during the second quarter, while the Nasdaq 100 plummeted about 22% over concerns that rate hikes by the Federal Reserve jeopardized tipping the US economy into recession. Since then, the S&P index has earned about 14%.
In aggregate, the value of the PIF’s disclosed portfolio in the US plummeted by around USD 3 billion in the second quarter to approximately USD 40 billion, according to information from the filing that was compiled by Bloomberg. Much of the weakening was due to an USD 8.3 billion decrease in the value of the PIF’s stake in electric car-maker Lucid Motors, which tumbled after it slashed production levels.
As well as buying about USD 482 million of shares in Starbucks Corp. and approximately USD 496 million in Costco Wholesale Corp., the PIF also drove greater into tech stocks, entering Abu Dhabi wealth fund Mubadala Investment Co. to develop into a go-to investor in the sector.
The PIF invested around USD 522 million in Datadog Inc. and approximately USD 2 billion in Electronic Arts Inc. during the second quarter, according to the filing.
