From Aramco IPO to sustainability: five key takeaways from Saudi Arabia’s FII 2019 conference

Participants at the Future Investment Initiative (FII) summit at the King Abdulaziz Conference Center in Saudi Arabia’s capital Riyadh. (AFP)
Updated 02 November 2019

From Aramco IPO to sustainability: five key takeaways from Saudi Arabia’s FII 2019 conference

  • Virtually every financial panel had some line on the Saudi Aramco IPO, and it was the top dinner-table topic of conversation too
  • One of the mind-boggling facts on offer was that Saudi Arabia has the second-highest level of per capital spend on technology, only behind gadget-crazy Japan

RIYADH: The time has come to hang another Future Investment Initiative badge on the lanyard tree in Kane Castle, and wrap up from Riyadh for another year. That’s three in a row I’ve attended now. If the event is staged in the same form next year (see below) surely I’ll qualify for some kind of loyalty reward — maybe special “light search” status through the airport-type security on each entrance to the Ritz Carlton? Or diner a deux with Pepper the robot?

You can probably tell my mind is wandering, but FII has that effect on you. A combination of early-morning starts, Riyadh rush-hour driving and Ritz Carlton security — followed by the zappy mind blast that is the FII experience — tend to make your train of thought a bit random. So, in an effort to bring some order, here is a list of my five top takeaways from FII 2019.

1. The IPO of Saudi Aramco was by far the hottest topic at the show. From the very first morning, when local media reported that a date had been set for the long-awaited share sale, the question I heard most over the three days was: Is it on? Virtually every financial panel had some line on the IPO, and it was the top dinner-table topic of conversation too. Over the past three years, the future of the Kingdom has become inexorably intertwined with the Aramco IPO. We should not have much longer to wait now.

2. Sustainability has come off the tick-box list and is now being taken seriously by the world’s big decision-makers. In 2017, at the first FII, concerns about climate change and the environment were paid lip-service, but you got the impression it was only to put a cross in the appropriate ESG box. In 2019, many speakers made sustainability the top items in their keynotes, including the Saudi energy minister Abdul Aziz bin Salman with his “circular carbon economy.” There is nothing so potent as an idea whose time has come.

3. The future will be smart, and automated. Aramco was the biggest single conversation topic, but more official time was taken up by technological innovation, artificial intelligence, robotics, digital infrastructure and the rest of the “smart” revolution. One of the mind-boggling facts on offer was that Saudi Arabia has the second-highest level of per capital spend on technology, only behind gadget-crazy Japan. Pepper the robot was only the tip of an iceberg of automated floor cleaners, autonomous cars and more apps than you could imagine existed.

4. It’s still the people that make FII a success. One of the great pleasures of walking the hangar-like halls and corridors of the Ritz Carlton complex is the random meeting. You’re having a quick nicotine fix on the terrace and find yourself beside Masayoshi Son of SoftBank (there purely to get some air and escape the frigid air-conditioning). It’s disconcerting, to say the least. Some of the best meetings begin this way. I randomly bumped into British businesswoman Amanda Staveley, for example, and heard intriguing whispers of big deals ahead the football world. A few candid minutes with former White House communications director Anthony Scaramucci produced some unprintable anecdotes and a firm conviction that Donald Trump would not be president again.

5. There are some serious choices to be made about FII 2020. After a successful third event in which it has established itself as the premier thought-leadership event in the Middle East — living up to the “Davos in the Desert” sobriquet — in 2020 FII will find itself with come serious competition. Next November, the Kingdom will host the G20 gathering of world leaders, perhaps the ultimate event in the global forum space. Is Riyadh big enough for both of them within a few weeks of each other? We shall see.


Alibaba confirms huge Hong Kong public listing worth at least $13bn

Updated 15 November 2019

Alibaba confirms huge Hong Kong public listing worth at least $13bn

  • Over-allocation options could take the total value to more than $13 billion, making it one of the biggest IPOs in Hong Kong for a decade
  • Alibaba Chief Executive Officer said the group wanted to participate in Hong Kong’s future

HONG KONG: Chinese technology giant Alibaba on Friday confirmed plans to list in Hong Kong in what it called a $13 billion vote of confidence in the turbulent city’s markets and a step forward in its plans to go global.
The enormous IPO, which Hong Kong had lobbied for, will come as a boost for authorities wrestling with pro-democracy protests that have tarnished the financial hub’s image for order and security and hammered its stock market.
Alibaba will offer 500 million shares at a maximum of HK$188 apiece to retail investors, the company said. The number eight is considered auspicious in China.
Over-allocation options could take the total value to more than $13 billion, making it one of the biggest IPOs in Hong Kong for a decade after insurance giant AIA raised $20.5 billion in 2010.
Alibaba had planned to list in the summer but called it off owing to the city’s long-running pro-democracy protests and the China-US trade war. The US and China are now working on sealing a partial trade deal.
Daniel Zhang, Alibaba Chief Executive Officer, said the group wanted to “contribute, in our small way, and participate in the future of Hong Kong.”
“During this time of ongoing change, we continue to believe that the future of Hong Kong remains bright,” he said.
The firm’s shares are already traded in New York. A second listing in Hong Kong is expected to curry favor with Beijing, which has sought to encourage its current and future big tech firms to list nearer to home after the loss of companies such as Baidu to Wall Street.
In the statement, Zhang said that when Alibaba went public in 2014 it “missed out on Hong Kong with regret.”
Mainland authorities have also stepped up moves to attract such listings, including launching a new technology board in Shanghai in July.
The listing comes after the city’s exchange tweaked the rules to allow double listings, while Chief Executive Carrie Lam had also been pushing Alibaba’s billionaire founder Jack Ma to sell shares in the city.
“The listing in Hong Kong will allow more of the company’s users and stakeholders in the Alibaba digital economy across Asia to invest and participate in Alibaba’s growth,” the company said.
It has long been expected to launch a multibillion-dollar stock listing in Hong Kong but appeared to postpone the offering because of political and economic turmoil.
Hong Kong’s key Hang Seng Index rose 0.48 percent in morning trading following the announcement
Chinese shoppers set new records for spending on Monday’s annual 24-hour “Singles’ Day” buying spree, despite an economic slowdown in the country and the worries over the US trade war.
It said consumers spent $38.3 billion on its platforms over that stretch, up 26 percent from the previous all-time high mark set last year.
Alibaba also said it saw record amounts of cross-border sales, underlining its plans to expand globally.
“Globalization is the future of Alibaba Group. We firmly believe the marriage of digital technology and commerce will bring about unprecedented change that will not be limited by borders,” Zhang said.