Time: October 04, 2018
Image used for illustrative purpose.
An Aramco oil tank is seen at the Production facility at Saudi Aramco’s Shaybah oilfield in the Empty Quarter, Saudi Arabia May 22, 2018.
The Aramco postponement is a benefit for the country, and the acquisition of SABIC makes more sense, Haddad told the Citi Middle East Media Summit.
The decision to delay the initial public offering of Saudi Aramco was a positive development for Saudi Arabia, one of the Kingdom’s leading financial advisers said yesterday.
Carmen Haddad, CEO of the Saudi business of American banking giant Citi, told a conference in Dubai that a takeover by Aramco of SABIC, the industrial conglomerate owned by the Public Investment Fund (PF), was a more rational option.
“The Aramco postponement is a benefit for the country, and the acquisition of SABIC makes more sense,” Haddad told the Citi Middle East Media Summit.
Citi last year resumed investment banking operations in Saudi Arabia after a 13-year absence, and has since moved into a prominent role advising the government on its privatization program. Citi is reported to be one of the banking advisers on the Aramco-SABIC deal, though Haddad declined to comment on that.
She mounted a strong defense of the Kingdom’s record in achieving some important goals of the Vision 2030 strategy so far. “The PIF is on track. It is making investments in important areas like electric car companies and other areas.
“In financial markets, we have seen significant structural changes at the Tadawul and the Capital Markets Authority that have encouraged foreign investors,” she added.
Haddad said that real progress had also been made on the social side of the Vision 2030 strategy, with the decision to allow women to drive and the limitations placed on the powers of the religious police.
She thought there was still work to be done on the planned privatization program, though she expected progress soon on the plans to sell off government holdings in airports, water companies and other utilities. Enabling smaller and medium-sized enterprises also need more work, she said.
Haddad said she was impressed by the measures toward greater transparency taken by the Saudi ministry of finance, and by the recent budget measures intended to stimulate economic growth next year.
“In Vision 2030 there is a co-ordination of policy that has not been seen before. Today we are in an environment where there is rational spending. The removal of subsidies was painful, but why subsidize people who do not need it? For those who do, there is the Citizens Account,” she said.