Saudi Arabia witnessing 'major economic transformation'

May 3, 2018

Saudi Arabia is witnessing a 'major economic transformation, said senior delegates at the 13th edition of Euromoney Saudi Arabia Conference which opened in capital Riyadh.

More than 1,700 delegates and scores of influential speakers are taking part in the two-day event which will debate the kingdom’s future, crude rebound, privatisation agenda and geopolitical risk.

Attracting delegates from across the Middle East and beyond, the forum, which concludes tomorrow, explores financial opportunities and challenges in the Kingdom.

Mohammed Al Jadaan, Saudi Minister of Finance, officially inaugurated the event. He commented on the remarkable progress of the Kingdom’s Vision 2030 economic development strategy in his keynote address.

“The world is expecting positive growth rates in both developed and emerging markets, which will increase expectations of improved economic growth in the Kingdom, despite risks to global markets, and large and rapid changes in the oil market as well,” said Al Jadaan.

'The Saudi economy continues to be the focus of attention of major companies and investors around the world, due to its great economic significance on a regional and international levels and its huge and promising investment opportunities,' he noted.

In its Executive Board Article IV Consultation with Saudi Arabia, the International Monetary Fund (IMF) praised the magnitude of the economic reforms being carried out by the Kingdom's government, as well as the progress being made in achieving the objectives of the structural reform agenda under Vision 2030, particularly with respect to consolidating the country's fiscal position, which is beginning to bear fruit,” he added.

Al Jadaan said the government was on track to cut the budget deficit to 7 per cent of its GDP.

Privatisation is at the forefront of delegates’ minds, as the kingdom aims to raise $10 billion through the sale of government assets over the next two years, with the most recent plans to sell sports clubs and a major desalination plant, among other state-owned assets, announced in April.

In addition, the role of the financial sector in driving sustainable growth in the Kingdom was a key topic. Tens of billions of dollars are entering Saudi Arabia ahead of a potential MSCI upgrade to emerging market status, and national and international investors are tracking the progress of the market with interest.

One of the highlights of the morning keynotes was an interview with Mohammed El Kuwaiz, Chairman of Saudi Arabia’s Capital Market Authority about the Authority’s role in supporting these dynamic changes.

“Innovation is driving change in Arabia,” remarked El Kuwaiz. “The challenge is that innovation has always been faster than regulation and we need to fit innovative businesses within the existing regulatory framework,” he added.

Tadawul CEO Khalid Abdullah Al Hussan also spoke, highlighting the new opportunities being created by the launch of Real Estate Investment Trusts (REITs) in the Kingdom:

“Our REITs pipeline is healthy and we are positive about the main market. We want to see more of these launches, and are working to bring them to market,” he noted.

Also on-stage was a series of international keynote interviews with senior executives of some of the world’s largest banks, including Citigroup, HSBC and BNP Paribas.

The conference was preceded by an hour-long networking session and pre-conference special session on public-private partnership (PPP) infrastructure, featuring representatives from the International Finance Corporation; National Center for Privatization & PPP (NCP); and ASMA Capital Partners.

The final keynote interviews of the morning included Yousef Al-Shelash, Chairman of the Board of Directors and founding shareholder of Dar Al-Arkan Real Estate Development Company and Yasir Al-Sharif, CEO of Jabal Omar Development Company.

With women gearing up to resume driving in the Kingdom next month after a decades-long ban, female employment and financial inclusion were also hot topics – Saudi Arabia has set itself a target of boosting the number of women in the workforce in line with the Vision 2030 economic development strategy, said the organisers.

This area was explored in the day’s first panel, titled The Saudi and Global Economy: 2018-2019, it stated.

Following a networking lunch hosted by chemicals manufacturer SABIC, the afternoon sessions opened with a keynote address from Dr Fahad AlShathri, Deputy Governor for Research and International Affairs, Saudi Arabian Monetary Authority, followed by a keynote interview with Louis Taylor, Chief Executive of the United Kingdom’s export credit agency, UK Export Finance.

The second panel discussion of the day focused on debt capital markets, with a keynote interview with Fahad A Al Saif, President, Debt Management Office, Adviser to Minister of Finance, Ministry of Finance, Saudi Arabia to set the scene.

The panel the reviewed issuances made in the past two years, considering the factors that influenced market choice, and debating what new structures, currencies and tenors the Kingdom might capitalise on this year.

Oil, gas and energy prices were key areas of interest for delegates, with the Kingdom preparing to list state oil company Saudi Aramco and crude prices hitting $75 per barrel for the first time in four years. There is also the prospect of Donald Trump re-imposing sanctions on oil from Iran, and potentially introducing them in Venezuela.

Victoria Behn, Director, Middle East and Africa at Euromoney Conferences, said: 'Today’s first day of The Euromoney Saudi Arabia Conference has been a fascinating series of discussions, highlighting the remarkable range of changes taking place in the Kingdom at the moment.'

'We’re very grateful to all our speakers and look forward to welcoming delegates back for the closing day tomorrow,” he added.

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