24/10/2017 10:00 AST

It’s a big week for Saudi Arabia’s Crown Prince Mohammed bin Salman. For the first time since his elevation as heir to the kingdom, he will play host to a Davos-like gathering of the global investing elite. Heavyweights from SoftBank’s Masayoshi Son to U.S. Treasury Secretary Steven Mnuchin are rolling into Riyadh to see at first hand his plans to make the city a regional financial powerhouse. Hanging over the affairs will be the up-in-the-air status of the biggest deal in capital-markets history.

Since the so-called Future Investment Initiative came together a few months ago under the auspices of Saudi’s massive Public Investment Fund, questions about the viability of a planned $100 billion initial public offering of stock in Saudi Aramco, the national oil company, have intensified. Chief among them is the difficulty of reaching the $2 trillion valuation for the group that the ruling family wants, according to news stories. Last week Reuters reported that China offered to buy 5 percent of Aramco in a deal that could circumvent an IPO.

The snag with the Chinese option is that Saudi Arabia has other objectives beyond raising cash to fatten the kingdom’s finances and fund social welfare. The Aramco offering is a key step towards making Riyadh a regional, if not international, capital for capital. It is part of the crown prince’s blueprint for reducing Saudi Arabia’s reliance on oil – a feat never fully achieved by a major resource economy in the modern era.

As noted in a report by State Street Global Advisors on the eve of the FII confab, which kicks off on Tuesday, “the Saudi Aramco transaction should be leveraged in a much more significant way to change the relationship between the Saudi kingdom, the stewards of the economy, its citizens and the international investment community.”

The crown prince is banking on Riyadh’s appeal as a financial hub to meet the extraordinary ambitions of his Vision 2030 plan to move away from hydrocarbons – wise given the accelerating adoption of electric vehicles – towards other industries, including financial services. Transforming the $700 billion economy and better sharing the wealth with 33 million subjects, two-thirds of whom are under the age of 30, is of existential importance for the Saudi monarchy.

Market authorities have taken strides to make the Tadawul, the Saudi bourse, an easier place for foreigners to buy shares and even short them. As a result, Saudi stocks are being considered for inclusion in indexes widely followed by investment professionals. The FTSE Russell is mulling whether to upgrade Saudi Arabia to emerging-market status. So is MSCI, which will decide by next June whether to include Saudi shares in its MSCI Emerging Markets Index. If it does, the country’s weighting, at around 2.4 percent according to State Street, could lead to inflows of around $38 billion.

But the big numbers are those associated with privatizations, with Aramco top of the list. Speaking to Reuters, Vice Minister for Economy and Planning Mohammed al-Tuwaijri estimated there could be $200 billion forthcoming from the sale of various assets ranging from housing and water to telecommunications and even religious-tourism services.

Click here for more


Reuters

MSCI’s Saudi upgrade decision is independent of Aramco IPO, official says

23/02/2018

The global index provider MSCI’s decision to include Saudi Arabia in its emerging market index is independent of its stock market’s ability to absorb the estimated $100 billion initial public offerin

The National

Saudi Aramco sets up National Power Academy

23/02/2018

Saudi Aramco, in association with nine local and international organizations, has established the National Power Academy (NPA) to provide the local and regional markets with highly qualified staff.

Trade Arabia

For timing of Aramco IPO, watch forward oil price curve

19/02/2018

It’s the burning question in the oil industry: when will Saudi Arabia pull the trigger on the Aramco stock market listing? Many industry experts are focusing on the current level of oil prices. Howev

Arab News

Ticker Price Volume
QNBK 127.00 43,799
SABIC 104.61 3,002,041
BURUJ 35.17 343,045
STC 75.83 355,162
ALMARAI 51.15 371,471
SCACO 5.75 0
PETRORABIGH 23.55 3,067,281
Ticker Price Change
GLOBAL 0.00 0.00 (0.00%)
MARIN 0.00 0.00 (0.00%)
AINV 0.00 0.00 (0.00%)
TII 0.00 0.00 (0.00%)
IIC 0.00 0.00 (0.00%)
Damac to experience 'cash flow pressure' in 2018, says EFG Hermes

23/02/2018

Operational and financial challenges at Damac Properties, one of the UAE’s biggest listed real estate developers, are expected to continue this year after the company reported a 25 per cent drop in f

The National

MSCI’s Saudi upgrade decision is independent of Aramco IPO, official says

23/02/2018

The global index provider MSCI’s decision to include Saudi Arabia in its emerging market index is independent of its stock market’s ability to absorb the estimated $100 billion initial public offerin

The National

National Bank of Oman CEO Al Musalmi resigns

23/02/2018

Ahmed bin Jaffar Al Musalmi, Chief Executive Officer of the National Bank of Oman (NBO), has resigned from his post, the bank confirmed on Thursday.

In a statement released online, the ban

Times of Oman

Adnoc selects Chemlube for base oil sales in Europe

23/02/2018

The Abu Dhabi National Oil Company (Adnoc) has concluded an exclusive agreement with Chemlube, appointing the Switzerland-based company as the exclusive seller of its Group III Base Oil product in Eu

Trade Arabia

Saudi Aramco sets up National Power Academy

23/02/2018

Saudi Aramco, in association with nine local and international organizations, has established the National Power Academy (NPA) to provide the local and regional markets with highly qualified staff.

Trade Arabia