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.

Lebanon removes banking secrecy rules to fight corruption

Updated 58 min 42 sec ago

Lebanon removes banking secrecy rules to fight corruption

  • The move opens the way for investigations into bank accounts of current and former officials such as Cabinet ministers

BEIRUT: Lebanon’s parliament approved on Thursday a law to remove decades-old banking secrecy rules in order to better fight rampant corruption that has pushed the country to the edge of economic collapse.
The move opens the way for investigations into bank accounts of current and former officials such as Cabinet ministers, legislators and civil servants, state-run National News Agency reported.
The restoration of stolen public money in the corruption-plagued nation has been a key demand of protesters who have been demonstrating since mid-October against Lebanon’s ruling elite, which they blame for widespread corruption and mismanagement.
The approval of the law came two months after the Cabinet approved a draft resolution to abolish the country’s banking secrecy laws, which have turned tiny Lebanon into the region’s Switzerland, attracting clients from around the Arab world who prized the anonymity its banks offered.
The new law gives powers to National Anti-corruption Commission and a Special Investigative Committee at the central bank to investigate bank account of officials, the report said.
For Thursday’s session, Lebanese lawmakers convened inside a Beirut theater so that they could observe social distancing measures imposed during the pandemic. Dozens of anti-government demonstrators briefly clashed with riot police outside as legislators met.
As lawmakers in face masks arrived at the theater, known as the UNESCO palace, paramedics sprayed them with disinfectant before they entered, one at a time.
Lebanon has been facing its worst economic crisis in decades, with unemployment figures soaring and the local currency losing more than half of its value against the dollar.
After the banking secrecy measure was passed, Parliament Speaker Nabih Berri suspended the session until later in the afternoon when the legislators were to discuss a draft general amnesty law.
The amnesty issue has deeply divided parliamentary blocs, with Christian groups calling for pardoning Lebanese who fled to Israel after it ended its occupation of southern Lebanon in 2000, while former Prime Minister Saad Hariri and others want the release of hundreds of Islamists held as terror suspects.
Lebanon and Israel are at a state of war and some Lebanese who fled to Israel now hold Israeli citizenship. Scores of protesters demonstrated in Beirut and southern Lebanon on Thursday against pardoning those living in Israel.