Undeterred by Khashoggi murder, global executives return to Saudi Arabia. As expected. Indignation is over, back to business as usual. Funding for NEOM Babylon will continue unabated.
By Stephen Kalin and Saeed Azhar. Reuters•April 24, 2019
RIYADH (Reuters) – Global finance chiefs who boycotted a Saudi investment summit last year following the murder of journalist Jamal Khashoggi returned to Riyadh this week as the Gulf kingdom gets business back on track.
Dozens of Western politicians and business executives pulled out of Saudi Arabia’s showcase summit in October amid global uproar over Khashoggi’s killing at the hands of Saudi agents inside the kingdom’s Istanbul consulate three weeks earlier.
A Saudi court has charged 11 suspects in a secretive trial and Western allies imposed sanctions on individuals. But Riyadh still faces criticism with some Western governments saying Crown Prince Mohammed bin Salman ordered the murder. Saudi authorities have denied any connection to the country’s de facto ruler.
Big investors in Saudi Arabia appear to be focused on potential deals in the largest Arab economy and the world’s top oil exporter as it opens up under a transformation drive led by Prince Mohammed.
HSBC CEO John Flint and Blackrock CEO Larry Fink, who had stayed away from last year’s event, joined panels at the two-day financial forum that began on Wednesday, as did co-president of JPMorgan Chase & Co, Daniel Pinto.
“This is an economy that we have a lot of confidence in, I think the future is bright,” Flint told the gathering. “We are excited about the role that we can continue to play here.”
Fink told another panel: “The changes here in the kingdom in the last two years are pretty amazing.”
The CEO of the London Stock Exchange, who had pulled out of last year’s event, is also scheduled to speak at the financial conference. Also slated to attend is the chairman of Japan’s Mitsubishi UFJ Financial Group Inc, whose CEO decided to abstain from the October summit.
Riyadh has been trying for months to refocus attention on its reforms, sending a senior delegation to the World Economic Forum in Davos and unveiling an industrial plan to attract hundreds of billions of dollars in investments in January.
The summit is taking place days after Saudi security forces thwarted an attack on a state security building in central Riyadh province, which authorities blamed on Islamic State.
On Tuesday Saudi Arabia announced it had executed 37 people in connection with terrorism crimes, the majority of whom were Shi’ite Muslims. Amnesty International criticized the executions as a “gruesome indication of how the death penalty is being used as a political tool to crush dissent” in the kingdom.
Asked how Saudi Arabia was addressing national security issues, Finance Minister Mohammed al-Jadaan told the audience the Gulf region is “one of the safest worldwide”.
“These incidents will happen,” he said of the Riyadh province attack. “We are working with the world to make sure that we combat the financing of terrorism… and we work very closely with the West and the regional forces to make sure that we intercept and fight terrorism.”
Earlier this month, state oil giant Saudi Aramco received more than $100 billion in orders for its first international bond issue, a record breaking vote of market confidence.
Energy Minister Khalid al-Falih told the forum that Aramco would be active in debt markets and that the $12 billion it raised in its debut bond issue was “only the beginning”.
The Saudi stock market has also seen an upsurge in foreign fund flows since the start of 2019 as the market enters global emerging market benchmarks. The index is up nearly 18 percent year-to-date, one of the best performing markets in the region.
The domestic financial sector is seeing a relative uptick in activity this year, fueled by an economic recovery from higher oil prices and government-led spending on big projects.
Jadaan told the forum that the ministry is launching a 12.5 billion riyal($3.33 billion)initiative to support private sector growth in the kingdom.
While some foreign investors are pushing ahead, other firms continue to keep Saudi Arabia at arm’s length, fearing a potential backlash at home over Khashoggi’s murder, the Yemen war and Riyadh’s detention of women’s rights activists.
Virgin Group last year suspended talks with the kingdom’s Public Investment Fund (PIF) over a planned $1 billion investment. Hollywood talent agency Endeavor and PIF “parted ways” after talks on the fund investing $400 million, a source familiar with the matter has said.
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