IFR Magazine - October 27, 2018

(Frankie) #1

Flow of funds to Saudi threatened


by fallout from Khashoggi murder


„ Emerging Markets After US$80bn of financing, could funds now start to dry up?


BY GARETH GORE


)TûWASûSUPPOSEDûTOûBEûAû
SHOWCASEûFORû3AUDIû!RABIAûANDû
ITSûVISIONûFORûTHEûFUTUREû"UTû
THEûMURDERûOFûTHEûJOURNALISTû
*AMALû+HASHOGGIûANDû
SUBSEQUENTûBOYCOTTûOFûTHEû
EVENTûBYûTOPûEXECUTIVESûWEREû
THEûMAINûTOPICSûOFû
CONVERSATIONûATûTHISûYEARSû
&UTUREû)NVESTMENTû)NITIATIVEû
CONFERENCEûINû2IYADH
4HEûBIGûQUESTIONûONû
EVERYONESûMINDSûWASûJUSTûHOWû
MUCHûOFûANûIMPACTûTHEûKILLINGû
ANDûITSûPOLITICALûFALLOUTûWOULDû
HAVEûONû#ROWNû0RINCEû
-OHAMMEDûBINû3ALMANSûGRANDû
PLANSûTOûOVERHAULûTHEû
KINGDOMSûOIL
DEPENDENTû
ECONOMYûnûANDûWHETHERû
INVESTORSûWOULDûCONTINUEûTOû
lNANCEûHISûVASTû6ISIONûû
PROJECT


h4HISûCOULDNTûHAVEûHAPPENEDû
ATûAûWORSEûTIMEûFORûUS vûSAIDûONEû
SENIORûPERSONûATûTHEû0UBLICû
)NVESTMENTû&UND ûTHEû3AUDIû
SOVEREIGNûWEALTHûFUNDû
OVERSEEINGûMANYûOFûTHEû6ISIONû
ûPLANSûh7EûHADûBEENû
HOPINGûTOûSHOWCASEûOURû
AMBITIONSûANDûTALKûABOUTûOURû
PROJECTS ûBUTûITSûALLûBEENû
DROWNEDûOUTûBYûWHATû
HAPPENEDv
3OMEûINVESTORSûWEREûTAKENû
ABACKûATûTHEûTONEûANDûLANGUAGEû
USEDûBYûTHEûCROWNûPRINCEûATûTHEû
CONFERENCEû7HILEû-"3 ûASûHEûISû
WIDELYûKNOWN ûCALLEDûTHEûKILLINGû
AûhHEINOUSûCRIMEûTHATûCANNOTûBEû
JUSTIlEDv ûHEûALSOûSOUGHTûTOû
FRAMEûTHEûPOLITICALûFALLOUTûASûPARTû
OFûANûECONOMICûWARûAGAINSTû
3AUDIû!RABIA ûADDINGûTHATûTHEû
KINGDOMûWOULDûNOTûBEûDEFEATED
4HATûSTRUCKûAûDISCORDANTûNOTEû
WITHûATTENDEES

h4HINGSûHAVEûTOTALLYûCHANGEDvû
SAIDûONEûPRIVATEûEQUITYûINVESTORû
FROMû%UROPEûh7HENû)ûWASûHEREû
LASTûYEAR ûTHEûTONEûWASûVERYû
MUCHûBUSINESSûFRIENDLYû"UTû
THEIRûRESPONSEûTOûTHEûKILLINGûANDû
THEûAGGRESSIVEûRHETORICûTHATûWEû
AREûHEARINGûISûVERYûMUCHûMAKINGû
MEûTHINKûTWICEûABOUTûANYTHINGû
WEûDOûHEREv
4HEûSHIFTûINûSENTIMENTû
TOWARDSûTHEûKINGDOMûCOMESûATûAû
CRITICALûJUNCTUREû"ANKSûANDû
INVESTORSûHAVEûBEENûAûVITALû
SUPPLYûOFûCASHûTOûTHEûKINGDOMû
OVERûTHEûPASTûTWOûYEARS ûLENDINGû
THEûGOVERNMENTûANDû0)&ûAROUNDû
53BNûTOûHELPûFUNDûDOZENSûOFû
PROJECTS
"UTûMUCHûMOREûMONEYûISû
NEEDEDû4HEû0)&ûAIMSûTOûGROWûITSû
PORTFOLIOûTOû53BNûBYû û
DOUBLEûWHATûITûHADûAûYEARûAGOû
"ANKSûAREûKEYûTOûTHATûGROWTHû
THEYûAREûCURRENTLYûWORKINGûONûAû

LOANûOFûUPûTOû53BNûFORû
!RAMCOûTHATûWILLûALLOWûTHEû0)&ûTOû
MONETISEûITSûSTAKEûINû
PETROCHEMICALSûGIANTû3ABIC

3EVERALûSO
CALLEDûGIGAPROJECTSû
WILLûALSOûNEEDûHUGEûAMOUNTSûOFû
CASHû.EOM ûTHEûDEVELOPMENTûOFû
MOREûTHANûAûDOZENûNEWûTOWNSû
ANDûCITIESûONûTHEû2EDû3EAûCOASTû
THATûDESCRIBESûITSELFûASûhTHEû
WORLDSûMOSTûAMBITIOUSûPROJECTv û
ISûEXPECTEDûTOûCOSTû53BNû
ALONEû)TSûJUSTûONEûOFûAûLONGûLISTû
OFûHUGEûPROJECTSûTHATûAREû
CURRENTLYûINûPROGRESS

HSBC and CS lead banks at Saudi conference


„ Emerging Markets All major banks send delegations despite murder of journalist


BY GARETH GORE


AMIEû$IMONûHEADEDûAûLONGûLISTû
OFûSENIORûBANKERSûLEADINGûAû
BOYCOTTûOFû3AUDIû!RABIASû
mAGSHIPûINVESTORûEVENT ûTHEû
&UTUREû)NVESTMENTû)NITIATIVE ûINû
2IYADHûLASTûWEEK ûASûBANKSû
SEEKûTOûDISTANCEûTHEMSELVESû
FROMûTHEûKINGDOMûFOLLOWINGû
THEûMURDERûOFûJOURNALISTû
AMALû
+HASHOGGI
"UTûINûTHEûCORRIDORSûOFûTHEû
OPULENTû2ITZ
#ARLTONû(OTELûANDû
ADJOININGû+INGû!BDULAZIZû
)NTERNATIONALû#ONFERENCEû
#ENTRE ûNEARLYûEVERYûMAJORû
INVESTMENTûBANKûISûPRESENTû
7HILEûTHEûMOSTûSENIORûBOSSESû
HAVEûSTAYEDûAWAY ûTHEûVASTû
MAJORITYûOFûBANKSûHAVEûSENTû
DELEGATIONSûTOûSHOWûTHEIRû
COMMITMENTûTOû3AUDIûATûTHISû
TIMEûOFûCRISIS
!ûHUGEûPOTûOFûGOLDûONûTHEû
DISTANTûHORIZONûISûTHEûREASONû


THATûMANYûAREûRISKINGûTHEIRû
PUBLICûREPUTATIONSûBYûVISITINGû
THEû&))ûDURINGûTHISûTIMEûOFû
CONTROVERSYû4HEûKINGDOMû
HASûEMBARKEDûONûANû
IMMENSEûOVERHAULûOFûITSû
ECONOMY ûWHICHûISûEXPECTEDû
to lead to dozens of mega
DEALSûnûANDûBILLIONSûINûFEESûFORû
THEûBANKS
3TILL ûTHEREûISûAûWIDEûVARIATIONû
INûTHEûSIZEûANDûSENIORITYûOFû
DELEGATIONSûSENTûBYûTHEûBANKSû
(3"#ûISûBYûFARûTHEûBIGGEST û
ACCORDINGûTOûAûLISTûOFûATTENDEESû
SEENûBYû)&2 ûWITHûATûLEASTûû
BANKERSûSHOWNûASûPRESENTû3AMIRû
!SSAF ûHEADûOFûITSûINVESTMENTû
BANK ûEVENûTOOKûPARTûINûAûPANELû
ONûTHEûMAINûSTAGE
#REDITû3UISSEûISûANOTHERûBANKû
WITHûAûLARGEûDELEGATION ûWITHûû
BANKERSûLISTEDûASûATTENDINGû4HEYû
AREûLEDûBYû*IMû!MINE ûTHEû3WISSû
BANKSûINVESTMENTûBANKINGû
CHIEFû!MINEûANDû!SSAFûAREûTHEû

MOSTûSENIORûBANKERSûFROMûTHEû
INVESTMENTûBANKINGûCOMMUNITYû
TOûBEûLISTEDûASûATTENDINGûTHEû
CONFERENCE

PLAYING IT SAFE
/THERûBANKSûHAVEûSENTûMUCHû
SMALLERûnûANDûLESSûSENIORûnû
DELEGATIONSû-OST ûINCLUDINGû
'OLDMANû3ACHS û-ORGANû
3TANLEY û"ANKûOFû!MERICAû
-ERRILLû,YNCH û#ITIGROUPûANDû
$EUTSCHEû"ANK ûHAVEûSENTû
DELEGATIONSûOFûAROUNDûHALFûAû
DOZENûBANKERS ûMAINLYûMADEû
UPûOFûREGIONALû-IDDLEû%ASTERNû
ANDûLOCALû3AUDIûBANKERS
"YûCONTRAST û*0û-ORGANûISû
LISTEDûASûSENDINGûJUSTûTWOûOFûITSû
2IYADH
BASEDûBANKERSûTOûTHEû
EVENTû4HEû53ûBANK ûWHICHûHASû
EARNEDûMOREûTHANûANYûOTHERû
BANKûINû3AUDIûTHISûYEARûANDû
LAST ûHASûTAKENûWHATûISûSEENûASû
THEûBIGGESTûSTANDûINûTHEûWAKEû
OFûTHEûMURDER ûWITHûITSû#%/û

$IMONûTHEûlRSTûMAJORûBANKERû
TOûPULLûOUT
/THERS ûHOWEVER ûHAVEûANû
ALTERNATIVEûEXPLANATIONûh)TSû
THEûPEOPLEûTHATûMADEûTHEûLASTû
DOLLARûOUTûOFû3AUDIûTHATûWEREûTHEû
lRSTûTOûPULLûOUT vûSAIDûONEû.EWû
9ORK
BASEDûINVESTORûWHOûISû
ATTENDINGûTHEûCONFERENCEû
h4HOSEûTHATûSTILLûHAVENTûEARNEDû
MUCHûFROMûTHEûKINGDOMûYETûAREû
PLAYINGûITûSAFEv
$IMONSûOWNûSUPPOSEDû
AMBITIONSûTOûRUNûFORû53û
PRESIDENTûHAVEûALSOûBEENûCITED

FUTURE BUSINESS
7HETHERûTHEûPUBLICûBOYCOTTSû
HAVEûANYûIMPACTûONûFUTUREû
BUSINESSûWITHûTHEûKINGDOMû
REMAINSûTOûBEûSEENû4HEûSTATE
RUNûOILûGIANTû!RAMCOûISûINûTHEû
PROCESSûOFûSCRAMBLINGûTOGETHERû
UPûTOû53BNûTOûBUYûAûSTAKEûINû
3AUDIûPETROCHEMICALSûMAKERû
3ABICû.OûBANKSûHAVEûYETûBEENû

“We had been hoping
to showcase our
ambitions and talk
about our projects, but
it’s all been drowned
out by what happened”

Top news

Free download pdf