The future of intangible assets in the Kingdom of Saudi Arabia

This report from Deloitte Middle East and Saudi Authority for Accredited Valuers TAQEEM focuses on intangible assets and their increasing contribution towards the value composition of businesses whether measured in terms of market capitalisation or as part of premiums paid over net tangible assets. In this regard, we explore key trends from the Standard and Poor’s 500 (S&P 500) index over the past three decades. Our study traces the shift in the composition of the S&P 500 index from heavy industry focused corporations with significant tangible asset base towards more information and intangible assets driven corporations. 

The publication further presents a comparative analysis with Tadawul, the Saudi Arabian stock index, to establish that the Saudi Arabian economy is at the start of a similar transition. A review of select recent regional transactions illustrates how intangible assets are becoming a major value contributor in the region.

This paper discusses how intangible assets such as brand names, licenses, customer and supplier relationships, knowhow and developed software are increasingly becoming key value drivers for businesses in Saudi Arabia. The focus on intangibles from the stakeholders including management, shareholders and regulatory bodies, will continue to evolve in the near future with developing, growing and protecting intangible assets becoming a key stone for having successful businesses and capital appreciation.

If you would like to discuss the report, please contact Mohammad Araj.