Saudi Arabia’s Public Investment Fund (PIF) has significantly reduced its stake in Amazon, cutting it by nearly 80% in the latest quarter. This strategic move indicates a shift in investment priorities.
The sovereign wealth fund, managing over $700 billion in assets, disclosed in its recent Securities and Exchange Commission filing that it now owns fewer than 350,000 shares. This is down from over 1.5 million shares reported in June. The current holdings are valued at approximately $66 million, a significant decline from the previous $296 million.
PIF Exit from Call Options
PIF has also divested from its call option on Amazon, marking a strategic pivot away from leveraged investments in the tech giant valued at $1.95 trillion. A call option allows a trader the right to buy an asset at a predetermined price within a specified timeframe.
Rebalancing Strategy
This reduction in Amazon shares reflects a broader rebalancing of PIF’s portfolio. The fund aims to prioritize investments with clearer growth potential and sectors aligned with Saudi Arabia’s Vision 2030 economic transformation objectives.
Economic Context
The Kingdom’s budget deficit is projected to rise to 2.9% of GDP in 2024, according to a preliminary budget statement from the Ministry of Finance. Increased spending on the Vision 2030 economic transformation plan is a significant factor driving this deficit.
Focus on Domestic Projects
PIF has recently increased its stakes in companies like Lucid Motors and Rivian. It continues to support domestic mega-projects, including NEOM, the ambitious $500 billion smart city initiative.
PIF has also reduced its shareholdings in other prominent tech stocks in the first quarter of 2024. These include Microsoft, Salesforce, and PayPal, likely in response to volatile market conditions. Institutional investors managing $100 million or more in equities must disclose their holdings quarterly, as mandated by U.S. regulations.
