Update: Day 2 of the Saudi Future Investment Initiative
The Future Investment Initiative (FII) entered its second day, after an opening day which saw at least 25 deals valued at more than $50 billion being signed.
Reuters revealed that Saudi Crown Prince Mohammed bin Salman will address a forum today at the meeting of international investors.
The crown prince was heard declaring the event as “great – more people more money”, Reuters reported.
The crown prince told Bloomberg earlier this month that Riyadh would announce an “amazing deal” at FII this year.
Financial goodwill message
“Saudi said on Wednesday it would not penalize foreign banks boycotting the investment forum,” Reuters reported.
High profile personalities skipped the event until an investigation into the killing of writer Jamal Khashoggi is complete.
Saudi officials said the country’s leadership had no knowledge of and did not order such a terrible act and blamed rogue individuals for organizing the murder that allegedly took place October 2nd, at the Saudi consulate in Istanbul.
The Saudi central bank chief said foreign banks abstaining from the event may apply for licenses to operate in the Kingdom, the Middle East’s largest economy.
He additionally reiterated the country’s commitment to defend its currency peg to the dollar.
“We, at the central bank, deal in complete professional manner whether with local or international banks,” Saudi Arabian Monetary Authority Governor Ahmed al-Kholifey told Saudi-owned Al Arabiya television.
Some senior international bankers were in Riyadh in a sign that global banks were reluctant to walk away from lucrative Saudi deals.
Reuters reported the finance ministry saying in a Tweet that Saudi finance minister, Mohammed al-Jadaan, met the chief executive of HSBC’s global banking and markets’ unit and the deputy chairman of Japan’s biggest lender MUFG to discuss investment opportunities.
Russia sent a large delegation to FII led by Direct Investment Fund head Kirill Dmitriev.
Dmitriev said on Tuesday that while Khashoggi’s killing needed to be investigated and the culprits punished, the Saudi drive for economic and social reforms could not be ignored.
Important quotes today
Those in attendance for the better business session were global executives from companies including Alex Dimitrief, president and CEO of GE Global; Ziad Abu-Ghararah, secretary general of PERSGA; Paul Holthus, chief executive of the World Ocean Council; Mehmood Khan, chief science officer of PepsiCo; Marianne Laigneau, group senior executive vice president of EDF and Soren Schroder, chief executive of Bunge Limited, according to Arab news.
The plenary session speakers for the key theme capital markets were Ibrahim Al-Omar, governor of the Saudi Arabian General Investment Authority (SAGIA); Samir Assaf, CEO of HSBC Global Banking & Markets, and Shujun Li, founder, and managing partner of Trustbridge Partners.
Al-Omar, during the session, described the strength of the Kingdom’s financial sector particularly the “high liquidity in banks.”
The SAGIA chief likewise mentioned Saudi Arabia’s diversification away from oil as encompassed in Vision 2030 which, according to him, “is a once in a lifetime transformation.”
“We have a very strong financial sector with high liquidity in banks,” says Ibrahim Al-Omar, Governor of the Saudi Arabian General Investment Authority, as reported by Arab News.
HSBC’s Assaf, on the other hand, described the change in roles of banks after the crisis: “We have asked banks to hold much more capital to support balance sheets and … to deleverage.”
Assaf likewise noted the emergence of new types of capital markets suited for emerging markets, where much more borrowings are done in local currency, according to Arab News.
“This is something extremely important,” the HSBC executive said.
Samir Assaf, CEO of HSBC Global Banking & Markets: “We are seeing an emerging new type of capital market specifically for emerging markets. We are seeing much more borrowing happening in local currency. This is something extremely important.”
Help for Pakistan
As Pakistani Prime Minister Imran Khan attended the opening of the Future Investment Initiative in Riyadh on Tuesday, a deal was announced where Saudi pledged $3 billion in support to the country and allowed for up to $3 billion in deferred oil payments to help overcome a budget crisis the country is feeling.
Pakistani shares jumped 3.35% in early trade on Wednesday helped the aid pledge from Saudi that emerged from the Future Investment Initiative in Riyadh, according to Reuters.