With 50 per cent of Saudi Arabias population below the age of 25, Abdul Aziz al-Saghyir Holding (AAHC) has been shrewd to invest in companies that tap into this rising demographic. Consumer electronics, mobile telecoms, construction and food are all sectors that are booming in the kingdom, as the government looks to address the needs of the rapidly growing population. AAHC is keen to increase its investment in these areas and the outlook for these sectors is robust.
AAHC showed good caution in limiting its investment focus to Saudi Arabia in the wake of the Arab Uprisings, when the climate for doing business in the region cooled and many firms adopted a wait-and-see attitude. With his decades of experience in the market, Al-Saghyir was able to further strengthen his investment portfolio in the kingdom. But in order to grow more rapidly, AAHC needs to expand overseas and its interest in buying a food company in the UAE shows it is ready to do so.
One challenge AAHC faces domestically is finding qualified labour to work on construction schemes. The government has recently cracked down on the use of illegal workers, prompting tens of thousands of labourers to leave the country or revise their paperwork. And as a result, many projects have been cancelled or stalled due to the stepped-up Saudisation measures.
Unemployment is a major issue plaguing the Saudi economy. The government is keen to create more private jobs for nationals, which would greatly stimulate buying power and boost profits for companies Al-Saghyir invests in. But motivating large numbers of young nationals to gain work-related skills and join the private sector will not be an easy task, and the potential for unrest remains a worry, despite the billions of dollars that have been invested in social programmes by the government.