Nov. 30 marked five years of King Salman’s ascension to the throne. On this great national occasion, the Kingdom, its citizens and residents celebrated such an important day with joy, excitement and happiness along with great appreciation of the remarkable achievements that have happened in the Kingdom in all aspects of life, especially the achievements that directly affect health, education, public services and many others.
By virtue of specialty, I will address the economic and financial achievements that took place in the fifth year of the king’s reign.
The recent initial public offering (IPO) of 1.5 percent of the shares of Saudi Aramco of the 200 billion ordinary shares without par value was the most prominent financial achievement in the Kingdom’s stock market and attracted world attention.
The IPO results are remarkable both in terms of the size of the proceeds collected from the offering and the number of subscribers, though limited to qualified investors, Saudi and Gulf Cooperation Council (GCC) citizens and residents in the country.
Financial analysts have described Aramco’s IPO as “the IPO of the century.” Proceeds of the offering make it the biggest IPO in history, raising $25.6 billion, while the proceeds of the offering generated from Alibaba, Agricultural Bank of China and Industrial and Commercial Bank of China were $25 billion, $24 billion and $21.9 billion, respectively.
In terms of the national economy and the banking sector performance, the economy continued to achieve a number of outstanding results, as the gross domestic product (GDP) has grown by 2.4 percent at constant prices in 2018, against a contraction of 0.7 percent in 2017. The Kingdom continues to maintain a stable monetary system coupled with fixed exchange rate (Saudi riyal to the dollar) while maintaining a comfortable level of foreign exchange reserves.
Moreover, the banking sector continued to achieve high levels of capital adequacy and good credit growth, which contributed significantly to the support of mortgage and small and medium enterprises (SMEs) financing, as the real estate lending has grown by 21 percent in the third quarter of 2019 compared to the same period of the previous year and the contribution of SME financing has increased to 6.2 percent of total financing.
Additionally, in 2019, the Kingdom became a permanent member of the Financial Action Task Force (FATF) after completing the mutual assessment process and by this, the Kingdom became the first Arab country to join the group, which is a recognition of its strong and solid measures in connection with combating money laundering and terrorist financing.
Last but not least, in 2019 the Kingdom was ranked by the World Bank’s Ease of Doing Business Index as the leading country in the world among 190 nations with regard to its fast-track business and economic reforms. It was also positioned as an overall evaluation by the same index in 62nd place ahead of 30th place of 2018.
Additionally, the Kingdom was able to list the Saudi stock market with a number of key financial market indicators such as FTSE Russell, MSCI EM, and others. Such listing has attracted foreign capital funds totaling of SR76 billion ($20.3 billion), and also has helped in expanding the investor base in the financial market and improved market liquidity levels.
In my opinion, since King Salman came to power in 2015, the Kingdom has witnessed remarkable civilized and modern achievements in all spheres of life.
Such achievements have contributed significantly in placing the Kingdom among the top ranks of countries globally and also have attracted the attention of top-class world financial organizations and institutions, including but not limited to the G20. The Kingdom received the G20 presidency file in December 2019 in preparation for the next meeting of the group in Riyadh in November 2020.
These economic and financial achievements could not have taken place without the guidance of King Salman and the supervision and follow-up of Crown Prince Mohammed bin Salman.
• Talat Zaki Hafiz is an economist and financial analyst.