RIYADH, March 30: Some $27 billion was withdrawn from foreign banks by Saudi investors after the Sept 11 attacks up to January this year, market sources told the daily Asharq Al-Wast. Most of the repatriated Saudi investments brought back were re-invested either in real estate or in the local stock market.
Ever since the Sept 11 incidents, and the negative fallout of the events for the Arabs and the Muslims in the United States and the West, there have been regular reports appearing here saying that the Saudi investors were feeling uneasy about their investments in that part of the world. Their worst apprehensions later became true when the authorities in the US froze the investments and the assets of a number of Saudi investors on charges of being linked to the perpetrators of the attacks on New York and Washington and a sort of racial profiling in the US.
The level of private Saudi investments in the US and elsewhere in the West are difficult to suggest and open to guesstimates. Some of the market analysts say it runs into hundreds of billion dollars or even more. Some of this money has apparently started trickling back into the kingdom, where it actually belonged, it now seems.
Dealers in real estate here point out to the rapid growth witnessed in the real estate market in the last quarter of 2001 and in January and February of the current year. This led to a perceptible revival of property development in the kingdom, specially in Riyadh, which is one of the fastest growing cities in the world. Riyadh has recently witnessed a huge construction boom concentrating on the building of residential and commercial complexes, holiday chalets and expansion of property development in the north and east of the city. Many say this boom owes to the returning dollars.
The Eastern Province has also experienced a strong real estate revival, particularly along the sea front from Al-Khobar to Dammam, market analysts pointed out.
Dealers estimate an expected investment on the sea front of up to SR3 billion with an average return of around 25 per cent on capital when all projects are completed.
The repatriation of assets from abroad also had a positive impact on stock markets as well. Dealers said the value of the stock exchange soared 28 per cent to SR84 billion during 2001.
Some of the traders anticipate a 30 per cent increase in transaction on the stock market, because of further asset repatriation from abroad expected during the next months.
Banking sources also revealed here that the current account balances with the local banks have grown substantially over the past months, possibly a result of the repatriation of funds from abroad.
However, most of these funds were later reinvested in the local stock market and real estate, banking sources added.
