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Monday, 25 April 2016

A bold bid to transform Saudi Arabia’s economy - FT.com

A bold bid to transform Saudi Arabia’s economy - FT.com:

"With a pledge to end Saudi Arabia’s reliance on oil in a mere four years, Mohammed bin Salman, the 30-year-old deputy crown prince, is attempting nothing less than a transformation of the conservative kingdom.
The overarching aims of his “vision” for 2030 — to slash wasteful government spending, develop the non-oil economy and boost private sector job creation — are the right ones. Yet Saudi rulers have talked of diversification for decades and failed to deliver it. The question is whether MbS, as the powerful son of King Salman has become known, stands a better chance of overcoming resistance from the bureaucracy, rivals for power within the royal family and ultra-conservative clerics."



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Saudi Arabia pledges economic overhaul to end ‘addiction to oil’ - FT.com

Saudi Arabia pledges economic overhaul to end ‘addiction to oil’ - FT.com:

"Saudi Arabia has unveiled a long-awaited plan for a radical transformation of its economy, pledging to end its “addiction to oil” and bolster its private sector in a shift that will see the planned $2tn listing of the state-owned Saudi Aramco.
Spurred by the collapse in oil prices, the kingdom has set out ambitious targets for economic and social reform under a “Vision 2030” plan that is the brainchild of Mohammed bin Salman, the 30-year-old deputy crown prince and the favoured son of King Salman bin Abdulaziz.
The kingdom could end its reliance on oil within four years, the prince said in a television interview after the Saudi cabinet approved the plan on Monday morning. Saudi Arabia currently derives more than 90 per cent of its budget revenues from hydrocarbons."



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Why global government debt is booming | FT Markets - YouTube

Why global government debt is booming | FT Markets - YouTube: ""



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Saudi Arabia approves ambitious plan to move economy beyond oil | World news | The Guardian

Saudi Arabia approves ambitious plan to move economy beyond oil | World news | The Guardian:

"Saudi Arabia has approved an ambitious strategy to restructure the kingdom’s oil-dependent economy, involving diversification, privatisation of massive state assets including the energy giant Aramco, tax increases and spending and subsidy cuts.

King Salman bin Abdulaziz announced cabinet backing for the Saudi Vision 2030 plan in a brief televised announcement on Monday in which he called on his subjects to work together to ensure success. Shares on the Riyadh stock market rose sharply.

Under Salman, who came to the throne in early 2015, economic strains have been the backdrop to rising tensions with regional rival Iran, the threat from Islamic State, the wars in Syria and Yemen, and a sense that the kingdom’s decades-long relationship with the US is fraying."



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Analyst view: Saudi Arabia's Vision 2030 reform plan | Reuters

Analyst view: Saudi Arabia's Vision 2030 reform plan | Reuters:

"ALI AL NASSER, FUND MANAGER AT LONDON-BASED DUET GROUP, WHICH HAS MORE THAN $1 BILLION INVESTED IN MIDDLE EAST AND NORTH AFRICAN STRATEGIES

The question is now again about execution. He said all of the right things, it is a matter of putting it all to work, and he seems to be very keen and very focused and all else being equal, there is pretty strong momentum behind it, and locally there is strong support for his agenda.

In terms of the stock market’s reaction – the market reacted positively to the interview and some of the headlines that have been coming out. The one take-away is that the move was restricted to the blue-chips in the market – large banks, large petrochemicals. Interestingly enough, the sectors that probably people were positioned in, in terms of expectations like for example healthcare, those did not move much higher during the interview or after the interview."



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Saudi Arabia's Break-Even Oil Price Plunges as Spending Drops - Bloomberg

Saudi Arabia's Break-Even Oil Price Plunges as Spending Drops - Bloomberg:

"Saudi Arabia will see the biggest drop this year in the oil price needed to balance its budget as Riyadh curbs spending amid the crude-market rout.
The kingdom’s fiscal break-even will fall to $66.70 a barrel from $94.80 in 2015, the International Monetary Fund said on Monday. The 30 percent drop is the steepest among a group of Middle East and North African OPEC members reviewed by the IMF."



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Saudi prince unveils sweeping plans to end 'addiction' to oil | Reuters

Saudi prince unveils sweeping plans to end 'addiction' to oil | Reuters:

"The powerful young prince overseeing Saudi Arabia's economy unveiled ambitious plans on Monday aimed at ending the kingdom's "addiction" to oil and transforming it into a global investment power.

Deputy Crown Prince Mohammed bin Salman said the world's top oil exporter expects state oil company Saudi Aramco [SDABO.UL] to be valued at more than $2 trillion ahead of the sale of less than 5 percent of it through an initial public offering (IPO).

He added that the kingdom would raise the capital of its public investment fund to 7 trillion riyals ($2 trillion) from 600 billion riyals ($160 billion)."



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Saudi Arabia to Overhaul Military in Plan for Life After Oil - Bloomberg

Saudi Arabia to Overhaul Military in Plan for Life After Oil - Bloomberg:

"Saudi Arabia’s plans to overhaul every corner of its economy won’t spare the military.

The kingdom will put its armaments industry under a holding company as it prepares for a post-oil era. Part of that reboot will seek to meet more of its military needs domestically and diversify its economy, Deputy Crown Prince Mohammed bin Salman said.

Prince Mohammed, second in line to be king and the power behind the throne, is leading the biggest economic shakeup since the founding of Saudi Arabia in 1932, with steps that include selling less than 5 percent of Saudi Arabian Oil Co., cutting subsidies and bringing more Saudis into the labor market. His goal: end eight decades of the dependency on oil."



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MIDEAST STOCKS-Saudi surges as reforms announced, rest of Gulf weak | Reuters

MIDEAST STOCKS-Saudi surges as reforms announced, rest of Gulf weak | Reuters:

"Saudi Arabia's stock market recovered from early losses and jumped 2.5 percent on Monday as Deputy Crown Prince Mohammed bin Salman announced an economic overhaul for the oil-dependent kingdom.

He outlined a restructuring of the government's Public Investment Fund to make it an international investment power, a planned sale of a stake of less than 5 percent in national oil giant Saudi Aramco, a restructuring of the housing ministry to increase supply of affordable housing, and a "green card" system to give expatriates long-term residence.

There were few details, and many analysts said execution of some of the reforms would be difficult. But the stock market was lifted by a sense that the government was acting energetically to address the economy's problems."



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Chinese debt-level record, Goldman offers $1 savings accounts | FirstFT - YouTube

Chinese debt-level record, Goldman offers $1 savings accounts | FirstFT - YouTube: ""



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MIDEAST STOCKS-Gulf lower and Saudi stocks slip ahead of reform plan | Reuters

MIDEAST STOCKS-Gulf lower and Saudi stocks slip ahead of reform plan | Reuters:

"Gulf shares edged lower, giving up recent gains, while the Saudi market fell ahead of the expected announcement of a major reform plan later on Monday.

Saudi Deputy Crown Prince Mohammed bin Salman is due to reveal his "Saudi Vision 2030", a plan to liberate the kingdom from its reliance on oil through steps such as a government efficiency campaign, a bigger private sector role, and more aggressive management of the kingdom's foreign assets.

Regional fund managers said some healthcare, education and insurance shares may see buying interest as a result of the plan, which is likely to try to develop those sectors."



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Middle East Non-Oil Growth Doubts - Bloomberg

Middle East Non-Oil Growth Doubts - Bloomberg:

"As oil exporters in the Middle East cut public spending and generous handouts to adapt to the reality of low crude prices, one casualty of their plans is economic growth and the ability to reduce one of the world’s highest youth unemployment rates. Non-oil economic expansion is set to slow to between 3.5 percent to 4 percent through 2021, compared with about 7.5 percent in the previous decade, according to the latest International Monetary Fund forecasts. Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman told Bloomberg in an interview late in March that the kingdom plans to raise non-oil income by more than $100 billion by 2020 through measures that include subsidy cuts and the introduction of value-added taxation. Bloomberg’s Alaa Shahine reports and HSBC Senior FX Strategist Dominic Bunning discusses with Bloomberg’s Anna Edwards on “Countdown.”"



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IMF says it's encouraged by Gulf's economic reform plans | Reuters

IMF says it's encouraged by Gulf's economic reform plans | Reuters:

"The International Monetary Fund said it was encouraged by the efforts of Saudi Arabia and other Gulf Arab oil exporters to repair damage to their state finances as low crude prices slash export revenues.

"I do see in a number of countries action to address the budget deficit," Masood Ahmed, director of the IMF’s Middle East and central Asia department, said in an interview. "That gives us encouragement and comfort."

He was speaking hours before Saudi Arabia's government was due to announce on Monday a sweeping plan to ensure its economy could survive an era of cheap oil, including spending cuts, tax rises and policies to expand the private sector."



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