Sovereign Wealth Funds From Oil-Rich Countries Are Dumping Stocks Big Time

Some of the world’s biggest sovereign wealth funds, from oil-rich countries, could dump more than $200 billion worth of stocks.

According to JPMorgan strategist Nikolaos Panigirtzoglou, sovereign wealth funds across the globe lost around $1 trillion of funds invested in equities due to the coronavirus outbreak. As a result, high oil exporters, mostly located in the Middle East and Africa, are facing double trouble - extremely low oil prices and equity losses in the stock market.

According to him, these funds have already sold $100 billion to $150 billion worth of stocks, while the remaining $50 billion to $75 billion is likely to be sold in the coming weeks and months.

Some estimates show that wealth funds from oil-rich countries have accounted for roughly 5-10% of total holdings on the global stock market. It is estimated that assets of sovereign wealth funds are worth more than $8 trillion.

Another estimate, from the Institute of International Finance (IIF), shows that Gulf sovereign wealth funds could see the value of their assets decline by nearly $300 billion, with around 70% of that figure coming from stock market losses.

It is estimated that Saudi Arabia, as the biggest oil exporter in the world, has around $300 billion in assets under management.