Saudi capital markets set for sustained growth

Updated 29 May 2014
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Saudi capital markets set for sustained growth

Executives meeting for the 9th Euromoney Saudi Arabia Conference have been impressed by the confidence and optimism of the Kingdom’s financial sector.
Confidence is seen as one of the key elements for sustained economic growth, and speakers from both within the Kingdom and from international banks and financing groups have all expressed strong confidence during this week’s event.
On the second day, the tone was set by Adel Saleh Al-Ghamdi, CEO of the Saudi Stock Exchange (Tadawul), who outlined the dynamic factors supporting the growth of the Arab world’s largest exchange.
The Tadawul is now the ninth largest emerging market stock exchange out of a basket of 24 exchanges in terms of market capitalization, and has the sixth highest liquidity.
“We see strong demand coming from within the Saudi Arabian economy,” said Al-Ghamdi.
“There are currently 35 family-owned businesses in Saudi Arabia exploring their options for IPO with financial advisers at this time.”
A morning session also saw senior executives from leading banks and enterprises, including Saudi Aramco, Manafea Holding Company, Amundi Asset Management, Saudi Kuwait Finance House Bahrain and HSBC Saudi Arabia take part in a major discussion on the direction and evolution of the Kingdom’s capital markets.
In the session about Potential Risks and Future Financial Crises, Robert Parker, senior adviser at Credit Suisse, discussed the significant improvement of bank risk globally over the last 3 years and warned about real estate bubbles: “Real estate bubbles in Singapore, London, Switzerland and other countries are considered as big financial risks.”
He commented: “Other financial risks include youth unemployment, large current account deficits in emerging markets, China’s economic slowdown and shadow banking.”
In addition, Parker identified 3 major geo-political risks that might lead to future financial crises, including the Russia-Ukraine conflict, the negotiations with Iran and the China-Korea-Japan triangle.
In a recent report, Al-Rajhi Capital noted that Tadawul is “ready for foreign investors,” thanks to a strong economy, robust banking system, institutions to manage foreign investment in equity markets, and a track record for managing banking liquidity.
The 9th Euromoney Saudi Arabia Conference is the longest-running, largest and most influential financial conference in the Kingdom. It has attracted around 1,300 pre-registrations from all over the region and the world.


Saudi Aramco to invest in refinery-petrochemical project in east China

Updated 18 October 2018
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Saudi Aramco to invest in refinery-petrochemical project in east China

  • This is the third such project in China that Saudi Aramco has set its sight on
  • Last month, Saudi Aramco signed a long-term deal with the Zhejiang project’s operator Zhejiang Rongsheng to supply crude oil

ZHOUSHAN, China/SINGAPORE: State oil giant Saudi Aramco signed an agreement on Thursday to invest in a refinery-petrochemical project in eastern China, part of its strategy to expand in downstream operations globally.
The memorandum of understanding between the company and Zhejiang province included plans to invest in a new refinery and co-operate in crude oil supply, storage and trading, according to details released by the Zhoushan government after a signing ceremony in the city south of Shanghai.
Zhejiang Petrochemical, 51 percent owned by textile giant Zhejiang Rongsheng Holding Group, is building a 400,000-barrels-per-day refinery and associated petrochemical facilities that was expected to start operations by the end of this year.
This is the third such project in China that Saudi Aramco has set its sight on as it seeks to lock in long-term outlets for its crude oil and produce fuel and petrochemicals to meet rising demand in Asia and cushion the risk of a slowdown in oil consumption.
Last month, Saudi Aramco signed a long-term deal with the Zhejiang project’s operator Zhejiang Rongsheng to supply crude oil.
The oil giant had not yet finalized the size of its stake in the project and still needed to complete due diligence, Aramco’s Senior Vice President of Downstream, Abdulaziz Al-Judaimi, said on the sidelines of the event.
Saudi Aramco expects to supply 170,000 barrels per day of Saudi crude to the refinery in Zhoushan when it starts operations, he said.
The first crude carrier supplying the refinery should arrive in December or January, depending on when the project starts, he added.
Aramco also owns part of the Fujian refinery-petrochemical plant with Sinopec and Exxon Mobil Corp, and has plans to build a 300,000-bpd refinery with China’s Norinco. It is also in talks with PetroChina to invest in a refinery in Yunnan.