Saudi’s PPA sees return sag to 8.1%

05 August 2014   Category: News, Global, Middle East   By Daniel Shane

Saudi Arabia’s Public Pension Agency (PPA), the Persian Gulf country’s second-biggest retirement savings manager, saw its return on investment slide to 8.1% last year, compared to 9.8% in 2012.

The PPA, which manages pension schemes for about 1.1 million Saudi Arabian nationals, said that its domestic equity holdings returned 25.7% during the year. According to Bloomberg data, the country’s Tadawul All Share Index rose by 23.0% throughout the course of 2013.

The pension manager does not publicly disclose its AUM or the precise composition of its portfolio, but its annual report said that 32% of its total assets were allocated to domestic equities at the end of last year.

Earlier this year, the PPA’s governor told Reuters that it was planning on boosting its investment in real estate-themed assets. "We are open for more investments in real estate. We are open for any good investment opportunity," Mohammad Al Kharashi was quoted as saying.

He added that the PPA would continue to support the kingdom’s local equities market, including in sectors such as petrochemicals, cement and banking.

Saudi Arabia’s chief legislative body recently proposed raising the retirement age in the public sector, where most of the country’s citizens are employed, from 60 to 62 years old.