Aramco IPO delay a benefit for the country, says top banking executive

Above, an Aramco facility in Dammam. (AFP)
Updated 04 October 2018

Aramco IPO delay a benefit for the country, says top banking executive

The decision to delay the initial public offering of Saudi Aramco was a positive development for Saudi Arabia, one of the Kingdom’s leading financial advisers said yesterday.

Carmen Haddad, CEO of the Saudi business of American banking giant Citi, told a conference in Dubai that a takeover by Aramco of SABIC, the industrial conglomerate owned by the Public Investment Fund (PF), was a more rational option.

“The Aramco postponement is a benefit for the country, and the acquisition of SABIC makes more sense,” Haddad told the Citi Middle East Media Summit. 

Citi last year resumed investment banking operations in Saudi Arabia after a 13-year absence, and has since moved into a prominent role advising the government on its privatization program. Citi is reported to be one of the banking advisers on the Aramco-SABIC deal, though Haddad declined to comment on that.

She mounted a strong defense of the Kingdom’s record in achieving some important goals of the Vision 2030 strategy so far. “The PIF is on track. It is making investments in important areas like electric car companies and other areas.

“In financial markets, we have seen significant structural changes at the Tadawul and the Capital Markets Authority that have encouraged foreign investors,” she added.

Haddad said that real progress had also been made on the social side of the Vision 2030 strategy, with the decision to allow women to drive and the limitations placed on the powers of the religious police.

She thought there was still work to be done on the planned privatization program, though she expected progress soon on the plans to sell off government holdings in airports, water companies and other utilities. Enabling smaller and medium-sized enterprises also need more work, she said.

Haddad said she was impressed by the measures toward greater transparency taken by the Saudi ministry of finance, and by the recent budget measures intended to stimulate economic growth next year.

“In Vision 2030 there is a co-ordination of policy that has not been seen before. Today we are in an environment where there is rational spending. The removal of subsidies was painful, but why subsidize people who do not need it? For those who do, there is the Citizens Account,” she said.


White House says Trump regrets not raising tariffs higher

US President Donald Trump arrives at the G7 summit in Biarritz, France, on Sunday. Trump had been trying to use the conference to rally global leaders to do more to stimulate their economies, as fears rise of a potential slowdown in the US ahead of his reelection. (AP)
Updated 46 min 1 sec ago

White House says Trump regrets not raising tariffs higher

  • President’s comments appear at first to mark a rare moment of self-reflection by the US leader

TOKYO: President Donald Trump said Sunday that he had second thoughts about escalating the trade war with China, but the White House later reversed that message saying the president was misinterpreted and that his only regret in hiking tariffs is that he didn’t raise them higher. Trump faced a tense reception from world leaders meeting amid mounting anxiety of a global economic slowdown at the Group of Seven summit in France. During a breakfast meeting with British Prime Minister Boris Johnson, Trump suggested he had qualms about the spiraling conflict. “Yeah. For sure,” Trump told reporters when asked if he has second thoughts about escalating the dispute, adding he has “second thoughts about everything.”
But hours later, White House press secretary Stephanie Grisham issued a statement saying Trump’s comments about US tariffs on China were “greatly misinterpreted.”
She said Trump only responded “in the affirmative — because he regrets not raising the tariffs higher.” The comments appeared at first to mark a rare moment of self-reflection by the famously hard-nosed leader. But the later reversal fit a pattern for Trump in recoiling from statements he believes suggest weakness.

HIGHLIGHTS

• President Donald Trump faced a tense reception from world leaders meeting amid mounting anxiety of a global economic slowdown at the Group of Seven summit in France.

• White House said comments about US tariffs on China were ‘greatly misinterpreted.’

Trump had been trying to use the conference to rally global leaders to do more to stimulate their economies, as fears rise of a potential slowdown in the US ahead of his reelection. Trump’s counterparts, including Johnson, are trying to convince him to back off his trade wars with China and other countries, which they see as contributing to the economic weakening.

US-Japan agreement
Trump and Japan’s Prime Minister Shinzo Abe announced on Sunday a deal in principle on a major bilateral trade deal.
“It’s a very big transaction,” Trump said after talks with Abe on the sidelines of the G7 summit.
“Billions and billions of dollars,” he said. “It involves agriculture, it involves e-commerce. It involves many things. We’ve agreed in principle.”

Amazon fires
Also on Sunday, French President Emmanuel Macron said that world leaders at the G7 summit have agreed to help the countries affected by the huge wildfires ravaging the Amazon rainforest as soon as possible.
“We are all agreed on helping those countries which have been hit by the fires as fast as possible,” he told journalists.