Saudi Arabia

Payments duo hush European IPO bankers’ lament

10 Apr 2019

Nexi and Network International are selling shares worth $4 bln amid a dearth of new issues in 2019. The Italian and Middle Eastern groups have reliable revenues and high margins, drawing interest even from edgy investors. Network’s superior growth rate merits a higher multiple.

Carlyle shows Mubadala benefits of procrastination

8 Apr 2019

The buyout group is acquiring 30-40 pct of Cepsa from the Abu Dhabi fund. The $12 billion enterprise value is in line with the Spanish energy group’s aborted IPO last October. The only downside is that a listing would have made it easier for Mubadala to sell more in future.

Aramco is just not big enough

2 Apr 2019

The Saudi oil producing giant is hyper-efficient, but it still doesn’t warrant the $2 trillion value envisaged by the kingdom’s crown prince.

Saudi Aramco is big, just not big enough

2 Apr 2019

The oil producer’s accounts show it is hyper-efficient. That helps its valuation, as does the rise in the price of crude since Aramco first flirted with an IPO. But while the company is a giant, it still doesn’t warrant the $2 trillion value envisaged by Saudi’s crown prince.

Aramco flashes its cash but also its independence

1 Apr 2019

The Saudi oil giant’s debut bond prospectus shows $111 bln of net income in 2018. Yet Aramco will only pay half the $69 bln needed to acquire Riyadh’s SABIC stake upfront. Potential debt and equity investors will be heartened that there is an implied limit to government meddling.

Saudi’s $69 bln asset rejig starts banker payback

27 Mar 2019

Aramco is buying a 70 pct stake in chemical group SABIC from the kingdom’s sovereign wealth fund. The reshuffle is mostly an internal affair but the oil giant will issue bonds to pay for it. That gives banks who have spent years courting the company some return for their efforts.

Goldman Sachs is down but not yet out in the Gulf

21 Mar 2019

Abu Dhabi fund Mubadala says it won’t hire the Wall Street bank due to the 1MDB scandal. With the UAE a key part of regional fees, further sovereign fund blackballs would hurt. Still, Goldman has other markets, and a similar spat between Citi and ADIA didn’t cause lasting damage.

Middle East payments IPO is spiciest in hot sector

21 Mar 2019

Network International is planning a London listing that values it at up to $3 bln. A focus on emerging markets, where cash dominates, leaves plenty of room for electronic payments to take off. The risk is tech firms offer Middle Eastern and African shoppers a slicker alternative.

Cox: Impeachment hedge runs through Saudi Arabia

21 Feb 2019

As the U.S. special counsel’s work wraps up, investors are pondering how a move by Congress to oust President Donald Trump would affect financial markets. One of the more intriguing ideas is a hedge against the knock-on effect of impeachment on the Saudi-dominated oil market.

Khashoggi is ghost at Milken’s Abu Dhabi confab

15 Feb 2019

Financiers at the billionaire’s annual Gulf shindig adopted a Trumpian shrug over Saudi agents’ murder of the dissident journalist. Lucrative forthcoming Aramco deals and White House support for the regime explain why. But the issues raised by Khashoggi’s death still linger.

Aramco’s new tangent more rational than it looks

12 Feb 2019

The Saudi oil giant wants to develop oil and gas projects overseas. Like its planned purchase of SABIC, that sits uneasily with other strategic goals. But emphasising lower-carbon gas while burnishing global credentials is sensible.

Saudi’s sunny debt offer belies gathering clouds

10 Jan 2019

Riyadh’s successful $7.5 bln bond sale suggests investors have moved on from the Khashoggi murder. Yet long-dated Saudi debt trades at an implied discount to its rating. With the kingdom too optimistic about oil prices and facing peak demand, markets won’t always be so friendly.

Trump can get what he wants from Saudi in 2019

14 Dec 2018

As the year closes, oil prices have fallen to well below highs that riled the U.S. president. The risk is OPEC supply cuts and sanctions on Iran will send them back up. Yet scope to influence the kingdom on output – as well as its behaviour in the region - gives him a hedge.

Saudi can pick a path through its OPEC minefield

27 Nov 2018

Riyadh must somehow please oil-producing peers who want to bolster prices and a U.S. president who wants the opposite. Crude costs will rise when Donald Trump’s temporary Iranian oil waivers expire. Saudi can appease both sides by making equally temporary reductions in output.

Trump’s Saudi amorality can make Gulf great again

26 Nov 2018

Support for Mohammed bin Salman after the murder of Jamal Khashoggi has skewered U.S. claims to moral leadership. Yet the U.S. president now has huge leverage to force Saudi’s crown prince to reverse course on Qatar, Yemen and other blunders. He would be a fool not to use it.

Saudi stock market’s “MbS discount” to get worse

22 Nov 2018

Since Jamal Khashoggi’s murder in October, foreigners have dumped Riyadh-listed assets. Donald Trump’s indifference to the crown prince’s alleged role in the killing offers some reprieve. But the kingdom’s stability and long-term economic progress have been permanently impaired.

Oil forecasting goes from tough to pointless

14 Nov 2018

In recent months crude has hit $86 a barrel, fallen to $65, and is now rising again. Oil prices drive other markets, but predicting them can be a waste of time. Changing demand outlooks, Saudi turmoil and Trump are only the most volatile of a series of uncertainties.

Khashoggi affair presents economic risk for Egypt

30 Oct 2018

Repercussions of the Saudi journalist’s murder could dent Egypt’s return to growth and stability. Cairo depends on the remittances of workers in the kingdom and the flow of Gulf tourists to build foreign exchange reserves, without which the central bank can’t easily lower rates.

Saudi reforms crash into royal reputational risk

26 Oct 2018

In October 2017, Saudi Arabia’s Crown Prince Mohammed bin Salman outlined a more liberal and market-friendly vision in Riyadh. A year on, the kingdom is under fire after the death of Saudi journalist Jamal Khashoggi. Breakingviews explains what happened in between.

E-book: A year in the life of MbS

26 Oct 2018

In October 2017, Saudi Arabia’s Crown Prince Mohammed bin Salman outlined a more liberal and market-friendly vision in Riyadh. A year on, the kingdom is under fire after the death of Saudi journalist Jamal Khashoggi. Breakingviews explains what happened in between.