KSA to widen foreign investment access again in 2017

Saudi authorities aim to list around 5 percent of Aramco by the end of 2018 on both the Tadawul and one or more international markets. (Reuters)
Updated 30 September 2017

KSA to widen foreign investment access again in 2017

LONDON: Saudi Arabia plans to further open up its stock market to foreign investors later this year as it seeks to become an international capital markets hub, Mohammed Abdullah Elkuwaiz, chairman of the Capital Market Authority (CMA) told Reuters on Friday.
Qualified foreign institutions (QFIs) were allowed to begin investing directly in Saudi stocks in 2015 and qualification requirements were eased late last year.
“We are likely to follow up with a version three (of the QFI program) and maybe a version four shortly thereafter by continuing to deregulate foreign investor access,” said Elkuwaiz, who became chairman of the body in August.
“Our expectation is we continue the same cycle. Thereabouts every year we would expect a re-release.”
As part of Vision 2030, an ambitious reform plan to diversify the Saudi economy beyond oil, Saudi Arabia is trying to develop, open up and grow its capital markets.
The CMA has been revising rules to help the Saudi market enter international equity indexes, which would bring more foreign money.
New listing rules to be announced in the next month or two alongside new M&A rules will have an emphasis on driving debt issuance.
“It is part of the re-review of the issuing and listing rules of Saudi was both oriented toward making it easier to issue and list securities in general and specifically to make it much easier to issue and list debt securities,” he said.
Elkuwaiz said lot of the disclosure and offering requirements will be waived for publicly-traded companies which have already gone through much of the process for their equity listings.
Regulation on the creation of special purpose entities (SPE) to house assets for debt will allow the CMA to approve and license SPEs to stimulate debt activity.
Around five or six companies from a range of sectors have pending applications with the CMA to join the main equity market and the NOMU market, a parallel market Saudi Arabia recently launched for small and medium enterprises, Elkuwaiz said, and there are 25-30 mandates with banks for listings further down the line, all from Saudi companies.
“We are having very early discussions with non-Saudi issuers who would like to tap into Saudi investors,” Elkuwaiz said.
He said it was reasonable to expect foreign company listings from mid-2018.
Elkuwaiz said Riyadh’s Tadawul exchange was ready for any size of listing of state oil giant Saudi Aramco, and the only outstanding issue is the alignment of the exchange with any others where Aramco securities may be listed.
Saudi authorities aim to list around 5 percent of Aramco by the end of 2018 on both the Tadawul and one or more international markets, with London, New York and Hong Kong in the running.
The initial public offering (IPO) is the centerpiece of the Vision 2030, championed by Saudi Crown Prince Mohammad bin Salman who is expected to take the final decision about Aramco’s listing venue.

Trump vows to remain steadfast partner of Saudi Arabia

Updated 27 min 24 sec ago

Trump vows to remain steadfast partner of Saudi Arabia

  • The Kingdom is a great ally in our fight against Iran and terrorism, said US president.
  • Saudis have worked closely with us to keep oil prices at reasonable levels, he added.

JEDDAH: US President Donald Trump said on Tuesday that the United States intends to remain a “steadfast partner” of Saudi Arabia.

In a statement issued by the White House, he said he would not cancel multibillion-dollar military deals with Riyadh, adding: “If we foolishly cancel these contracts, Russia and China would be the enormous beneficiaries.”

Trump said US intelligence agencies are still studying the evidence in an attempt to discover how Saudi journalist Jamal Khashoggi was murdered inside the Saudi consulate in Istanbul on Oct. 2, and who planned it.

“The crime against Jamal Khashoggi was a terrible one, and one that our country does not condone,” the president said. “Indeed, we have taken strong action against those already known to have participated in the murder. After great independent research, we now know many details of this horrible crime. We have already sanctioned 17 Saudis known to have been involved in the murder of Mr. Khashoggi and the disposal of his body.

“King Salman and Crown Prince Mohammed bin Salman vigorously deny any knowledge of the planning or execution of the murder of Mr. Khashoggi. Our intelligence agencies continue to assess all information.

“We may never know all of the facts surrounding the murder of Mr. Khashoggi. In any case, our relationship is with the Kingdom of Saudi Arabia. They have been a great ally in our very important fight against Iran. The United States intends to remain a steadfast partner of Saudi Arabia to ensure the interests of our country, Israel and all other partners in the region. It is our paramount goal to fully eliminate the threat of terrorism throughout the world.”

Describing the world as “a very dangerous place,” Trump condemned Iran for its malign activity in the region.

“Iran...is responsible for a bloody proxy war against Saudi Arabia in Yemen, trying to destabilize Iraq’s fragile attempt at democracy, supporting the terror group Hezbollah in Lebanon, propping up dictator Bashar Assad in Syria (who has killed millions of his own citizens), and much more,” he said. “Likewise, the Iranians have killed many Americans and other innocent people throughout the Middle East. Iran states openly, and with great force, ‘Death to America’ and ‘Death to Israel.’ Iran is considered ‘the world’s leading sponsor of terror.’

“Saudi Arabia would gladly withdraw from Yemen if the Iranians would agree to leave. They would immediately provide desperately needed humanitarian assistance. Additionally, Saudi Arabia has agreed to spend billions of dollars in leading the fight against radical Islamic terrorism.”

Describing agreements reached during his trip to Saudi Arabia last year, Trump said: “The Kingdom agreed to spend and invest $450 billion in the United States. This is a record amount of money. It will create hundreds of thousands of jobs, tremendous economic development, and much additional wealth for the United States.

“Of the $450 billion, $110 billion will be spent on the purchase of military equipment from Boeing, Lockheed Martin, Raytheon and many other great US defense contractors. If we foolishly cancel these contracts, Russia and China would be the enormous beneficiaries — and very happy to acquire all of this newfound business. It would be a wonderful gift to them directly from the United States.”

Trump said that members of Congress were free to reach their own conclusions.

“I understand there are members of Congress who, for political or other reasons, would like to go in a different direction — and they are free to do so,” he said. “I will consider whatever ideas are presented to me but only if they are consistent with the absolute security and safety of America.

“After the United States, Saudi Arabia is the largest oil-producing nation in the world. They have worked closely with us and have been very responsive to my requests to keep oil prices at reasonable levels (which is) so important for the world. As president of the United States I intend to ensure that, in a very dangerous world, America is pursuing its national interests and vigorously contesting countries that wish to do us harm. Very simply, it is called ‘America First.’”