Britain can help KSA achieve its development goals, says UK’s economic secretary

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Basil Al-Ghalayini, chairman of BMG Financial Group, at the London Stock Exchange, with financial experts Edward Frazer, CEO of Trinity Group, and Michele Troiani, head of UK and Europe buyside relationship management at LSEG. (AN photo by Ziyad Alarfaj)
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Basil Al-Ghalayini, chairman of BMG Financial Group, at the London Stock Exchange. (AN photo by Ziyad Alarfaj)
Updated 12 July 2018

Britain can help KSA achieve its development goals, says UK’s economic secretary

  • An Arab News-BMG forum heard how the UK could step up support for Saudi Arabia’s ambitious reform plans
  • UK's Economic Secretary to the Treasury John Philip Glen said that as Britain prepares to break with Europe, that “now, more than ever” the UK stands behind Saudi Arabia’s ambitious vision for its future. 

LONDON: Britain is uniquely placed to help Saudi Arabia successfully achieve its development program for its financial sector, a key part of the Kingdom’s Vision 2030 reforms, the UK’s economic secretary to the treasury told a forum in London on Wednesday.

Addressing the 12th BMG Economic Forum, held in conjunction with Arab News, John Philip Glen MP said that as Britain prepares to break with Europe, that “now, more than ever” the UK stands behind Saudi Arabia’s ambitious vision for its future. 

“Today is a fantastic opportunity to consider the prospect of even further investment and dialogue between the UK and the Kingdom,” he said. 

“We are committed to strengthening these linkages even further as the UK leaves the EU to ensure we remain the gateway of the markets of the future and secure the commercial opportunities that this country voted to explore and deepen as Great Britain.

“We applaud Saudi Arabia’s ambition and stand as a willing Western partner.”

In his speech, titled “UK collaboration with Saudi Arabia’s Vision 2030 program,” Glen outlined how the UK could step up support for Vision 2030, helping the Kingdom to achieve a world-class Financial Sector Development Program (FSDP), one of the 12 executive programs launched by the Council of Economic and Development Affairs (CEDA) to achieve the objectives of Vision 2030.

“The FSDP sets the ambition of the Kingdom for its financial sector such as digitization, a drive toward a cashless society, and improved financial inclusion,” said Glen. 

“The FSDP also seeks to stimulate growth and capital markets development and we commend Saudi Arabia for its ambitious and comprehensive plan and I believe that we have much to offer the country.

“By engaging with Vision 2030, the UK can become a delivery partner, supporting the Kingdom’s vision to spurt growth and unlock potential. 

“The UK shines as a global financial hub with world-class expertise and a host of financial services that we could lend to Saudi Arabia and we believe Britain is uniquely placed to help translate the FSDP for an ambitious vision into something tangible and sustainable.”

He said that, as the Kingdom drives ahead with it blueprint for its future, the UK wants to ensure it offers more than just “warm words of support.” 

“British enterprise has entrenched fundamental strengths and the global reach of our financial markets and technology is one of one these,” he said.

Glen said that he envisions the UK helping Saudi Arabia achieve its development program for its financial sector by leveraging its cutting-edge expertise to develop the digital payments infrastructure in the Kingdom and encourage the entry of new service providers. 

“London is a global leader in technology so we can leverage our homegrown talent and exchange best practices with Saudi Arabian companies,” he continued. 

“The UK is also uniquely placed to support the upskilling of Saudi finance professionals.”

Glen said there is also work underway with the London Stock Exchange to help firms in the Kingdom to bolster their financial services capabilities. UK firms specializing in providing professional qualifications could further help Saudi Arabia establish a “financial sector academy,” as well as support other FSDP areas of focus by business-lending, asset management, capital market development and savings products. 

“We are committed even further to supporting Saudi Arabia’s capital markets and private sector-led initiatives to encourage deep and more liquid markets.”

Glen also hailed the Kingdom’s privatization program, one of 12 key elements of the Kingdom’s Vision 2030 reform plan. The government plans to raise about $200 billion through privatization, on top of the initial public offering of Saudi Aramco, which could bring in $100 million.

“Over the weekend my boss, our Chancellor of the Exchequer, met (Saudi) ministers of commerce and finance to discuss how the UK can support Saudi Arabia in delivering Vision 2030, expressing a desire for the private sector to lead this change,” he said.  “Because as a country and a government we believe freedom and rival potential of business is the driver of growth

“As a country, we have marched to the beat of commerce and the drum is only getting louder as we continue to strengthen our position as a financial engine of the world and a champion of the free market. 

“I hope that we can continue to work together to support stronger and deeper bonds and connections beyond borders, across markets, for many years to come.”

Senior Saudi officials, international sovereign fund officials, emerging fund managers, CEOs, investment bankers, and lawyers were among the speakers at the forum.

The high-level event, which forms the first of the annual two-day BMG Summer Retreat, discussed investment opportunities in Saudi Arabia and the Kingdom’s vision for the future, among many other topics. 

Government officials, regulators, and industry chiefs gathered on the iconic atrium balcony at the London Stock Exchange as the daily 60- second countdown officially marked the start of Wednesday’s trading — and served as a precursor to the forum.

Al-Ghalayini and Dr. Robert Barnes, CEO of Turquoise and global head of primary markets at the London Stock Exchange Group, stepped forward and completed the daily ritual of placing a bespoke engraved glass tablet onto the podium, setting off the 8 a.m. bell.

Talat Hafiz, secretary general of the Media and Banking Awareness Committee at Saudi Banks, led the first panel of the forum, under the theme “Business and Financial Environments in Saudi Arabia.”

“Saudi Arabia is ... the heart of the Arab world and an investment powerhouse,” said Hafiz.

Hussain Shobokshi, businessman and consultant and columnist, said: “Our biggest commodity used to be oil. Now, I believe our biggest commodity is youth.”

Apple Watch, FitBit could feel cost of US tariffs

Updated 20 July 2018

Apple Watch, FitBit could feel cost of US tariffs

SAN FRANCISCO: The latest round of US tariffs on $200 billion of Chinese goods could hit the Apple Watch, health trackers, streaming music speakers and other accessories assembled in China, government rulings on tariffs show.
The rulings name Apple Inc’s watch, several Fitbit Inc. activity trackers and connected speakers from Sonos Inc. While consumer technology’s biggest sellers such as mobile phones and laptops so far have faced little danger of import duties, the rulings show that gadget makers are unlikely to be spared altogether and may have to consider price hikes on products that millions of consumers use every day.
The devices have all been determined by US Customs and Border Patrol officials to fall under an obscure subheading of data transmission machines in the sprawling list of US tariff codes. And that particular subheading is included in the more than 6,000 such codes in President Donald Trump’s most recent round of proposed tariffs released earlier this month.
That $200 billion list of tariffs is in a public comment period. But if the list goes into effect this fall, the products from Apple, Fitbit and Sonos could face a 10 percent tariff.
The specific products listed in customs rulings are the original Apple Watch; Fitbit’s Charge, Charge HR and Surge models; and Sonos’s Play:3, Play:5 and SUB speakers.
All three companies declined to comment on the proposed tariff list. But in its filing earlier this month to become a publicly traded company, Sonos said that “the imposition of tariffs and other trade barriers, as well as retaliatory trade measures, could require us to raise the prices of our products and harm our sales.”
The New York Times has reported that Trump told Apple CEO Tim Cook during a meeting in May that the US government would not levy tariffs on iPhones assembled in China, citing a person familiar with the meeting.
“The way the president has been using his trade authority, you have direct examples of him using his authority to target specific products and companies,” said Sage Chandler, vice president for international trade policy at the Consumer Technology Association.
The toll from tariffs on the gadget world’s smaller product lines could be significant. Sonos and Fitbit do not break out individual product sales, but collectively they had $2.6 billion in revenue last year. Bernstein analyst Toni Sacconaghi estimates that the Apple Watch alone will bring in $9.9 billion in sales this year, though that estimate includes sales outside the United States that the tariff would not touch.
It is possible that the products from Apple, Fitbit and Sonos no longer fall under tariff codes in the $200 billion list, trade experts said. The codes applied to specific products are only public knowledge because their makers asked regulators to rule on their proper classification. And some of the products have been replaced by newer models that could be classified differently.
But if companies have products whose tariff codes are on the list, they have three options, experts said: Advocate to get the code dropped from the list during the public comment period, apply for an exclusion once tariffs go into effect, or try to have their products classified under a different code not on the list.
The last option could prove difficult due to the thousands of codes covered, said one former US trade official.