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Saudi Sees Deals Worth $50 Billion at Investment Conference Despite Boycotts

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  • Saudi Sees Deals Worth $50 Billion at Investment Conference Despite Boycotts

Saudi Arabia was set to sign deals worth $50 billion on Tuesday at the opening of an investment conference despite being overshadowed by the killing of journalist Jamal Khashoggi which prompted a boycott by Western politicians, top world bankers and company executives.

Energy Minister Khalid al-Falih told a panel that the world’s largest oil exporter was passing through a “crisis of a sort” but would power ahead with economic diversification plans.

“Nobody in the kingdom can justify it (Khashoggi’s killing) or explain it,” he said.

Speaking at the opening session, Saudi businesswoman Lubna Olayan described the killing of the dissident Saudi journalist which has sparked a global outcry and strained Riyadh’s ties with the West as “alien to our culture”.

“It is natural that our thoughts tend to focus on recent events surrounding the death of Jamal Khashoggi … may he rest in peace,” she said.

Hundreds of bankers and company executives joined officials at a palatial Riyadh hotel for the Future Investment Initiative. But while last year’s inaugural conference drew the global business elite, this year’s event has been marred by the pullout of more than two dozen high-level speakers.

Khashoggi, a critic of Saudi Arabia’s crown prince, vanished after he entered its consulate in Istanbul on Oct 2. After first denying any involvement in his disappearance, Riyadh on Saturday said Khashoggi died during a fight in the consulate. Later, a Saudi official attributed the death to a chokehold.

Turkey’s president said in parliament in Ankara on Tuesday that there was strong evidence the killing was savage and planned. He said he was not satisfied with Riyadh placing the blame on some of its intelligence agents.

Many foreign investors see a risk that the Khashoggi case, which drew global condemnation, could damage Riyadh’s ties with Western governments. Saudi Arabia’s stock index was down 1.7 percent in afternoon trading on persistent investor concern.

U.S. Treasury Secretary Steven Mnuchin and senior ministers from Britain and France pulled out of the event along with chief executives or chairmen of about a dozen big financial firms such as JP Morgan Chase and HSBC, and International Monetary Fund chief Christine Lagarde.

NEW DEALS

However, Saudi Arabia is set to sign deals worth more than $50 billion on the opening day in the oil, gas, industries and infrastructure sectors with firms such as Trafigura, Total, Hyundai, Norinco, Schlumberger, Halliburton and Baker Hughes.

Oil giant Saudi Aramco said it signed 15 memoranda of understandings worth $34 billion.

Total Chief Executive Patrick Pouyanné, a panelist on Tuesday, said the French oil and gas producer would announce a retail network in the kingdom with Saudi Aramco.

Russia sent a large delegation led by Direct Investment Fund head Kirill Dmitriev, who said Saudi Arabia’s economic transformation was “important for the world” and that partnerships between sovereign wealth funds was a “great opportunity”.

The managing director of the kingdom’s sovereign wealth fund, the main backer of the event, said the country was becoming more transparent and that the Saudi Public Investment Fund continued to develop new industries under economic reforms launched by Crown Prince Mohammed bin Salman.

Yasir al-Rumayyan said the fund has invested in 50 or 60 firms via SoftBank Group’s Vision Fund and would bring most of those businesses to the kingdom. PIF has committed to invest $45 billion in Vision Fund.

Many Western banks and other companies, fearful of losing business such as fees from arranging deals for Saudi Arabia’s $250 billion sovereign wealth fund, sent lower-level executives even as their top people stayed away.

Top executives of Asian firms have been hesitant to pull out, so the participation of Chinese and Japanese institutions may help Riyadh claim the three-day conference as a success.

For these reasons, the Western boycott may have little long-term impact on Saudi economic prospects.

Foreigners sold a net 4.01 billion riyals ($1.07 billion) of Saudi equities last week, by far the biggest pull-out of overseas money since the stock market opened to direct foreign investment in mid-2015.

The event is being held at the Ritz-Carlton in Riyadh, where scores of princes, businessmen and officials were detained in a crackdown on corruption soon after last year’s conference ended.

Authorities said the crackdown extracted over $100 billion from suspects in financial settlements. But that figure has not been verified, and details of the alleged crimes were never made public, fuelling investors’ concern about legal transparency.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Investment

Union Bank Launches Investment App M36 for Fixed-income Products, Others

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M36, a new digital platform designed to deliver a wide range of investment products directly to individuals, has launched in Nigeria.

Through an innovative, user-friendly app, M36 offers investment options not typically available on self-service digital platforms including foreign currency transactions, commercial papers, local and foreign denominated bonds, treasury bills and other fixed income products.

M36 also offers bespoke solutions for both new and experienced investors as well as a 24-hour lifestyle concierge service to meet the needs of discerning customers.

In a rapidly evolving environment with changing consumer behavior fueled by technology and growing access to information, M36 is looking to expand opportunities for investors at all levels, while also simplifying the process of investing.

M36 was developed by Union Bank as part of its strategic focus on delivering superior customer solutions leveraging technology and innovation.

The Bank partnered with several asset management companies to deliver the broad range of investment products on the M36 platform.

Chuka Emerole, Head, Treasury at Union Bank said about M36:

“M36 eliminates the traditional barriers to investing and offers investors direct access to financial instruments that would usually require the service of an investment or relationship manager.

“We’ve designed M36 to ensure simplicity in the onboarding and investing process while also empowering the customer to make sound investment choices based on their financial objectives.

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United States Firms Operating in Nigeria Plans to Invest $2.4 Billion in Nigeria – Report

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United States Firms Operating in Nigeria Plans to Invest $2.4 Billion in Nigeria – Report

A report compiled by the American Business Council, the United States Embassy, Verraki, KPMG and PwC showed American firms operating in Nigeria plans to invest $2.37 billion in the country in the next three years.

In the 2020 Nigeria Economic Impact Survey, the impact of US firms on the Nigerian economy was analysed while changes in business revenue, foreign investment, job creation, gross value added and plans for expansion were measured.

45 United States companies operating in Nigeria were surveyed and data obtained analysed, according to the report.

The report revealed that US companies in Nigeria created over 30,000 indirect jobs in 2019, a decline from three million in 2018 and over 13,100 direct jobs, down from 18,000 in 2018.

The firms realised N1.08 trillion in revenue in 2019, representing a decline from N1.47 trillion when compared to N1.47 trillion generated in 2018.

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Afreximbank, AAAM to Drive Automotive Investment

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Afreximbank

Afreximbank, AAAM to Drive Automotive Investment

The African Export-Import Bank (Afreximbank) and the African Association of Automotive Manufacturers (AAAM) have entered into a Memorandum of Understanding (MoU) for the financing and promotion of the automotive industry in Africa.

President of Afreximbank, Prof. Benedict Oramah and President of AAAM/Managing Director of Nissan Africa, Mike Whitfield, signed the MoU in early February, according to a statement yesterday.

The deal formalised the basis for a partnership aimed at boosting regional automotive value chains and financing for the automotive industry while supporting the development of enabling policies, technical assistance, and capacity building initiatives.

Oramah, said, “the strategic partnership with AAAM will facilitate the implementation of the Bank’s Automotive programme which aims to catalyze the development of the automotive industry in Africa as the continent commences trade under the African Continental Free Trade Area (AfCFTA).”

Under the terms of the MoU, Afreximbank and AAAM will work together to foster the emergence of regional value chains with a focus on value-added manufacturing created through partnerships between global Original Equipment Manufacturers (OEM), suppliers, and local partners.

The two organisations plan to undertake comprehensive studies to map potential regional automotive value chains on the continent in regional economic clusters, in order to enable the manufacture of automotive components for supply to hub assemblers.

“To support the emergence of the African automotive industry, they will collaborate to provide financing to industry players along the whole automotive value chain. The potential interventions include lines of credit, direct financing, project financing, supply chain financing, guarantees, and equity financing, amongst others.

“The MoU also provides for them to support, in conjunction with the African Union Commission and the AfCFTA Secretariat, the development of coherent national, regional and continental automotive policies, and strategies.

“With an integrated market under the AfCFTA, abundant and cheap labour, natural resource wealth, and a growing middle class, African countries are increasingly turning their attention to support the emergence of their automotive industries.

“Therefore, the collaboration between Afreximbank and AAAM will be an opportunity to empower the aspirations of African countries towards re-focusing their economies on industrialisation and export manufacturing and fostering the emergence of regional value chains,” the statement added.

“The signing of the MoU with Afreximbank is an exciting milestone for the development of the automotive industry in Africa. At the 2020 digital Africa Auto Forum, the lack of affordable financing available for the automotive sector was identified as one of the key inhibiters for the growth and development of the automotive industry in Africa and having Afreximbank on board is a game changer and a hugely positive development,” CEO of AAAM, David Coffey said.

“It is wonderful to have a partner that is as committed as the AAAM to driving the development and growth of our sector on the continent; this collaboration will ensure genuine progress for our industry in Africa,” Coffey added.

Other areas covered by the MoU include working with the African Union and the African Organisation for Standardisation to harmonise automotive standards across the continent and developing an automotive focused training program for both the public and private sector.

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