Saudi Arabia’s Islamic asset management resilient

SAUDI ARABIA: Fitch Ratings has reported that Saudi Arabia’s asset management industry demonstrated resilience through the height of the Iran conflict in the first quarter of 2026, with industry assets under management surpassing US$340 billion at end-1Q26, up 17% year-on-year (y-o-y) and 4% quarter-on-quarter, equivalent to approximately 26% of GDP, and projected to exceed US$400 billion by 2027. The Islamic finance dimensions of the industry remain dominant, with over 97% of mutual funds listed on the Saudi Exchange Shariah compliant as of mid-June 2026, while Sukuk represented over 60% of Saudi Arabia’s total debt capital market outstanding at end-May 2026. Nearly all Fitch-rated Sukuk outstanding in Saudi Arabia were investment grade at 98%, with over 90% in the ‘A’ rating category and over 98% of issuers carrying stable outlooks. Private funds continue to lead AuM composition at 54%, with real estate and equities as the primary allocations, growing 26% y-o-y. Fitch noted that notable regulatory initiatives by the Capital Markets Authority, including proposals to lower minimum capital requirements for custody activity by 60% and approvals for simplified investment funds and robo-advisory services, could further aid Islamic fund growth. The recent US-Iran deal may support a more favorable capital market environment, though Fitch cautioned that implementation risks and potential renewed instability remain.