Saudi Arabia, Middle East infrastructure and AI will drive the next rotation of global capital, BNY executive says
DAVOS: As global markets face increased volatility and changing capital flows, the Middle East, and Saudi Arabia in particular, is establishing itself as a long-term investment destination, according to Hani Kabraoui, senior executive vice president and head of international at BNY.
Speaking to Arab News at the World Economic Forum in Davos, Qabrawi noted that the region’s growing engagement with international investors and ambitions for large-scale infrastructure development are key factors shaping where global capital moves next.
“What’s really interesting about the Middle East to me is that it’s not just one thing,” Kablawi said. “It’s very different. The demand profile is very different, the investment structure is very different, and what they’re trying to achieve is very different depending on location.”
He said Saudi Arabia stands out in its approach to the global investment community.
“I’m excited that[Saudi Arabia]is taking strong action and reaching out to the investor community and saying, ‘Tell us what we should see,'” he said.
“We in Saudi Arabia are united in our approach to the international global investment community and we are able and willing to make the changes necessary to become a destination for capital and foreign direct investment in the coming years.”
Although foreign direct investment in Saudi Arabia has increased significantly in recent years, it remains at a relatively low level, Kablawi noted.
“Direct investment in Saudi Arabia has quadrupled in the past few years,” he said, adding that there is still plenty of room for growth.
He said Saudi Arabia understands what international investors want, especially in terms of transparency, data and risk-return profile.
Saudi Arabia also benefits from the presence of government and semi-state institutions that can help de-risk projects.
“They also have structures that allow them to balance risk and return well,” he said, pointing to partnerships involving state funds and sovereign wealth investors.
Central to its strategy is major infrastructure investment spanning transport, aviation, ports, logistics, rail and economic cities.
“They announced a big project, and we know what it’s like,” Kablawi said. “Now it’s important to build these projects in a way that attracts investment.”
Globally, capital flows continue to be concentrated in the United States, even during times of market stress. U.S. wealth remains above its long-term trend line, Kabraoui said, based on BNY data covering $58 trillion in assets under custody and management.
“Currently, U.S. stocks represent 64% of our total stock holdings, and U.S. government securities represent 72% of our total stock holdings,” he said.
He added that during the market volatility seen last April, Treasury holdings only declined slightly.
“It represented two things,” Kabraoui said. “One is that from a reserve currency status perspective, there is no alternative yet. And from an equity perspective, there is continued interest in the Magnificent Seven, tech stocks, AI, and the accessibility of those investments to global investors.”
Looking ahead to 2026, BNY analysts expect interest rates to ease in the U.S. and equity investment to expand beyond big technology companies. Kabraoui also highlighted that Europe remains an underperforming region for both equities and fixed income, despite growing infrastructure ambitions across the region.
“There is huge demand for infrastructure investment around the world,” he said, pointing to spending announced in the UK, Germany and the Middle East.
“In 2026, we would like to keep an eye on and hopefully support some of the rotation towards long-term productive finance,” he added.
Technology is another defining theme.
Kabraoui said BNY is focused on investing in areas it can control, particularly artificial intelligence and digital assets.
“We are one of the largest investors in both AI and digital assets within our peer group,” he said.
Since last year, BNY has deployed more than 130 AI use cases into production and made its enterprise AI platform available to all employees.
He added that the company currently has about 140 “digital employees” supporting day-to-day operations.
“The link between traditional and digital finance will become even stronger,” Kabraoui said. “The rails that BNY provides between traditional and digital finance will continue to grow.”
Looking ahead, he emphasized that progress depends on continued innovation, saying, “Anyone who has any first-mover advantage is just a first-mover advantage.” “A lot of people are going to push into it. You can never be complacent, but we like where we are right now.”
