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Ousted From Oil, Saudi Minister Can Make a Mark in Investing – Financial Post

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By Ellen R. Wald

(Bloomberg Opinion) — After a week of drama in global financial markets, it’s worth pointing out an intriguing development in Saudi Arabia that warrants watching. 

In a surprise move on Tuesday, the kingdom’s ruler King Salman announced the return to government of former oil minister Khalid Al-Falih, who will become head of a newly established ministry of investment. Just six months ago, Al-Falih was unceremoniously dismissed, his removal seen as a “fall from grace” – specifically the good graces of Crown Prince Mohammed bin Salman, who was reportedly displeased with Al-Falih’s slow and cautious approach to the Vision 2030 Saudi economic reform plan and the related IPO of state-owned oil company Saudi Aramco. Now, Al-Falih has been placed in charge of a ministry with an undefined mission and unclear responsibilities – but also much potential for helping Saudi Arabia become the welcoming partner for foreign businesses that it says it wants to be.

The choice of Al-Falih – who was at various times also the CEO of Aramco, the Minister of Health, a top adviser to the crown prince and a board member of the Saudi sovereign wealth fund – indicates that King Salman is hoping the new Ministry of Investment will be more than just a rubber stamp for the existing investment authorities. With extensive experience in the upper echelons of Saudi government and business, Al-Falih has the skills, knowledge and connections to mold it into something more powerful. 

The Saudi government’s investments are currently made by several authorities, most notably by the Saudi Arabia Monetary Authority (SAMA) and the country’s sovereign wealth fund, otherwise known as the Public Investment Fund (PIF). The PIF controls roughly $300 billion with the intention to grow its size to $2 trillion. SAMA, along with functioning as Saudi Arabia’s central bank also manages a sovereign wealth fund with $494 billion in assets, as of 2018. SAMA, unlike the PIF, has taken a typically conservative approach and avoided public attention.

Right now, the Saudi PIF — which is central to the kingdom’s efforts to diversify the economy away from oil — is overseen by Yasir Al-Rumayyan, a close adviser to the crown prince. Investments include some high-profile technology holdings such as Uber Technologies Inc., as well as a $400 million stake in Uber founder Travis Kalanick’s CloudKitchens startup. The PIF sold almost all of its shares in Tesla Inc. right before a massive rally and put $45 billion into SoftBank Group’s first Vision Fund, whose losing bets include WeWork. Al-Rumayyan and the PIF also raised eyebrows recently by tapping Carla DiBello, an entrepeneur and socialite friend of Kim Kardashian West, as an adviser on the fund’s proposed acquisition of Premier League soccer team Newcastle United.

With the appointment of Al-Falih and the creation of the new Ministry of Investment, Saudi Arabia has a chance to heighten its credibility in the business and investment world. In Saudi Arabia’s bureaucracy, the influence and strength of a ministry is largely determined by the ambitions and assertiveness of those who run it. Ministries have long been run as fiefdoms, according to Middle East scholar Steffen Hertog. If Al-Falih exerts influence over the various existing investment authorities in the kingdom, he could exercise some needed oversight.

King Salman could have picked anyone to run this new Ministry of Investment. Choosing Al-Falih, especially after he was let go for reportedly pushing back against the crown prince’s investment agenda, appears to be sending a message that the King expects a change to be made. It was Al-Falih who King Salman tapped to fix the Ministry of Health in just one year after an outbreak of Middle East Respiratory Syndrome (MERS).

Foreign businesses generally have a good impression of Al-Falih, as both a bureaucrat and a businessman. But they shouldn’t take his appointment alone as reason to jump into deals with the Saudi government. Global businesses that are considering opportunities in the kingdom and partnerships with Saudi government investments will need to wait and see what Al-Falih does with this new position. Will he employ the full weight of his authority and try to rein in and oversee the kingdom’s investment authorities? The potential is there, but will he be able to assert himself and his ideas? And if he faces pushback, will he be able to prevail in a power struggle?

To contact the author of this story: Ellen R. Wald at ewald@tvslconsulting.com

Bloomberg.com

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX up more than 200 points, U.S. markets also higher

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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S&P/TSX composite little changed in late-morning trading, U.S. stock markets down

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TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.

The S&P/TSX composite index was up 0.05 of a point at 24,224.95.

In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.

The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.

The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.

The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.

This report by The Canadian Press was first published Oct. 10, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

The Canadian Press. All rights reserved.

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