Third annual Future Investment Initiative opens in Riyadh

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Participants arrive at Riyadh’s Ritz Carlton hotel for the three-day Future Investment Initiative conference. (AN/Ziyad Alarfaj)
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Participants arrive at Riyadh’s Ritz Carlton hotel for the three-day Future Investment Initiative conference. (AN/Ziyad Alarfaj)
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Participants arrive at Riyadh’s Ritz Carlton hotel for the three-day Future Investment Initiative conference. (AN/Ziyad Alarfaj)
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Participants arrive at Riyadh’s Ritz Carlton hotel for the three-day Future Investment Initiative conference. (AN/Ziyad Alarfaj)
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Participants arrive at Riyadh’s Ritz Carlton hotel for the three-day Future Investment Initiative conference. (AN/Ziyad Alarfaj)
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Above, a robot kiosk on site at Riyadh’s Ritz Carlton hotel for the three-day Future Investment Initiative conference. (AN/Ziyad Alarfaj)
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Above, a robot kiosk on site at Riyadh’s Ritz Carlton hotel for the three-day Future Investment Initiative conference. (AN/Ziyad Alarfaj)
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All roads lead to Riyadh’s Ritz Carlton hotel for the three-day Future Investment Initiative conference. (AN/Ziyad Alarfaj)
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Above, an augment reality exhibit at the Future Investment Initiative conference. (AN/Ziyad Alarfaj)
Updated 30 October 2019

Third annual Future Investment Initiative opens in Riyadh

  • PIF CEO Al-Rumayyan: Saudi Aramco will soon have more shareholders from institutions
  • Saudi Aramco separated from Kingdom’s energy ministry ‘to prevent conflict of interest’

DUBAI: Yasir Al-Rumayyan, the Governor of Saudi Arabia’s Public Investment Fund, said that Saudi Aramco would soon have more shareholders from institutions during the opening plenary of the three-day Future Investment Initiative being held at the swanky Ritz Carlton hotel in Riyadh.

The initial public offering of Saudi Aramco, believed to be at the Tadawul,  could be forthcoming with an official announcement expected any time soon. Russian and Chinese investors are keen to join international element for the IPO of the world’s largest oil company.

Al-Rumayyan also said the reason for the separation of Saudi Aramco from the Kingdom’s energy ministry ‘was to prevent conflict of interest.’

The PIF chief in his opening address earlier said the Future Investment Initiative has evolved from just an annual gathering to become a hub for building relationships.
Watch the opening day sessions of Future Investment Initiative 2019:

“Until now the Future Investment Initiative has been an annual conference, today it is an institution... it will be a global hub to build relationships," he said told participants.

Al-Rumayyan also said the Riyadh gathering’s inclusivity has expanded: “In 2017, the participants were mainly coming from the Americas, Europe and the Middle East. Today they are coming from Japan, China, India, Russia … all united in a spirit of collaboration.”

The opening plenary “The next decade: How will a new era of economic ambition shape the global economy?” tackled ways to foster growth – ideas, innovations, technologies and policies – amidst heightened global uncertainty.

“I think we are all dealing with uncertainty more than before in terms of technology… the Internet, social media are making it difficult to manage companies and countries,” Blackstone Group founder and CEO Stephen Schwarzman told the assembled audience. “The kind of anger that social media can mobilize is something that, all of us, no matter what, have to deal with.”

Goldman Sachs Group Chairman John Waldron meanwhile said: “Our relationship with our clients has changed a lot over the past years – the focus on capital spend is shifting from more traditional areas to more innovation, computing, AI.”

Noel Quinn, Group Chief Executive at HSBC Holdings, meanwhile told the panel that “Parts of the industry are changing dramatically through the use of technology.”

“The global frame works and global architecture that we used to operate within are changing rapidly around us - technology is changing the market, businesses have to survive by adapting,” Quinn added.

Al-Rumayyan meanwhile highlighted the adaptability of the Kingdom’s sovereign wealth fund.

“You should always have adaptability. At PIF, we are doing investments with impact in residential, in healthcare, in renewable energy and many other sectors – we can bring certainty to these because of the impact of big investments,” he said.

From a Middle Eastern and Asian viewpoint, Mukesh Ambani, the Chairman and Managing Director of Reliance Industries, commented: “The world is transiting with the introduction of new technologies – they are transforming global economy and while they bring uncertainty, they also bring opportunity.”

Khaldoon Al-Mubarak, CEO of UAE-based Mubadala Investment Group, said “We have been seeing heightened uncertainty for a while now – for the last 15 years we have seen an escalation of this, I expect the future to be the same, but that doesn’t mean it’s good or bad.”

“As an investment institution, we have tried to navigate through this uncertainty ... We have the benefit of being a sovereign fund to take a long-term view.”

The Mubadala chief likewise noted ‘the power and disruption of technology are going to make it impossible on the prediction side ... you have to be very well-versed in the language of artificial intelligence.”

Meanwhile, Russian Direct Investment Fund CEO Kirill Dmitriev said: “sovereign funds are going to be particularly useful going forward because they can plan for longer horizon, they have lots of capital to deploy.”

The third annual conference is being attended by heads of states, government leaders and decision-makers from the business and finance communities.
Among the dignitaries expected during the event include King Abdullah of Jordan, Prime Minister Narendra Modi of India, President Jair Bolsonaro of Brazil, President Muhammadu Buhari of Nigeria while business leaders including Mukesh Ambani, chairman and managing director of Indian conglomerate Reliance Industries; Khaldoun Al-Mubarak, CEO of Mubadala Investment Group; and will Alain G. Bejjani, CEO of Majid Al-Futtaim will be joining plenaries during the opening sessions.


American Airlines threatens to cancel some Boeing 737 MAX orders

Updated 11 July 2020

American Airlines threatens to cancel some Boeing 737 MAX orders

  • American’s stand comes as airlines are finding financing increasingly difficult and expensive
  • Airlines have canceled orders for more than 400 MAX planes so far this year

DALLAS: American Airlines is warning Boeing that it could cancel some overdue orders for the grounded 737 MAX unless the plane maker helps line up new financing for the jets, according to people familiar with the discussions.
American’s stand comes as airlines are finding financing increasingly difficult and expensive as the coronavirus pandemic has crippled their operations.
American had 24 MAX jets before they were grounded in March 2019. It has orders for 76 more but wants Boeing to help arrange financing for 17 planes for which previous financing has or will soon expire, according to three people who spoke Friday on condition of anonymity to discuss private talks between the companies.
If the companies can’t reach an agreement, American could use MAX financing that is about to expire to pay for jets from Boeing’s archrival Airbus, one of the people said.
Chicago-based Boeing said in a statement that it is working with customers during “an unprecedented time for our industry as airlines confront a steep drop in traffic,” but did not comment on the talks with American. The Fort Worth, Texas-based airline declined to comment.
News of American’s threat to cancel some orders was first reported by The Wall Street Journal.
The situation underscores the strain facing airlines during the coronavirus pandemic. It has grown more difficult and expensive for them to finance planes. American’s negotiating stance doesn’t reflect a loss of confidence in the plane’s safety, the sources said.
The MAX was Boeing’s best-selling plane before crashes in Indonesia and Ethiopia killed 346 people and led regulators around the world to ground all MAX jets.
The coronavirus pandemic has compounded Boeing’s problems by causing a sharp drop in air travel and a loss of interest in new planes. Nearly 40 percent of the world’s passenger jets are idled, according to aviation data supplier Cirium, as most airlines have more planes than they need until travel recovers.
That has made it more difficult to finance planes. United Airlines and Southwest Airlines found foreign lenders who agreed in April and May to buy MAX jets and lease them to the airlines, but those carriers are in stronger financial situations than American.
The 17 planes in dispute were supposed to have been delivered to American at least a year ago. That has given the airline the option of canceling the order without penalty and recovering its down payments now, according to one of the people familiar with the matter. The deliveries have been delayed while Boeing works to fix a flight-control system suspected of playing a role in the crashes.
Airlines have canceled orders for more than 400 MAX planes so far this year, and 320 are no longer certain enough to count in Boeing’s backlog. Some were dropped because the airline buyer ran into financial problems, while others were swapped for different Boeing planes. The company had taken 4,619 orders through May.
Air travel in the US fell about 95 percent from the beginning of March until mid-April. Traffic has recovered slightly since then, but remains down more than 70 percent from a year ago. With little revenue coming in, airlines are slashing spending and preparing to furlough thousands of workers this fall.
American has accepted $5.8 billion in federal aid to pay workers through Sept. 30, reached tentative agreement on a $4.75 billion federal loan, and lined up billions more in available cash from private lenders to survive the travel downturn.