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First day of Future Investment Initiative sees mega-deals and nod to future technologies

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Saudi Arabia's Crown Prince Mohammed bin Salman with Jordan's King Abdullah II at the Future Investment Initiative forum in Riyadh. (FII)
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The spectacular light show to open the Future Investment Initiative event. (Arab News)
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Dubai ruler Sheikh Mohammed bin Rashed Al-Maktoum in attendance at the opening ceremony of the Future Investment Initiative conference in Riyadh. (AFP)
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Pakistani Prime Minister Imran Khan, right, with Saudi business executive Lubna Olayan during a panel at opening day of the Future Investment Initiative in Riyadh. (AFP)
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Yasir Al-Rumayyan, head of the Public Investment Fund, gives his welcome speech. (Arab News)
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Yasir Al-Rumayyan, head of the Public Investment Fund. (Ziyad Alarfaj / AN)
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Opening day panel at the Future Investment Initiative in Riyadh. (Ziyad Alarfaj / AN)
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Saudi business executive Lubna Olayan. (Ziyad Alarfaj / AN)
Updated 23 October 2018
Arab News
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First day of Future Investment Initiative sees mega-deals and nod to future technologies

Updated 23 October 2018
Arab News

RIYADH: The Future Investment Initiative (FII) kicked off in Riyadh on Tuesday, with the head of Saudi Arabia’s sovereign wealth fund saying the event can do "business for good." He also said the event would see countries coming together to "collaborate for the future.”

The event in Riyadh also saw a raft of deals worth $50 billion being finalized, including 12 so-called “mega-deals” being signed.

 

 

Yasir Al-Rumayyan, head of the Public Investment Fund and the opening speaker at the event, also said his fund was targeting a $2 trillion portfolio by 2030.

 

 

Pakistani Prime Minister Imran Khan, Khaldoon Al-Mubarak, CEO and MD of Abu Dhabi’s Mubadala Investment Company as well as Kirill Dmitriev, CEO of the Russian Direct Investment Fund, were all in attendance on Tuesday.

Khan said, during the panel on emerging opportunities, that his country was looking for a mix of loans from the IMF and “friendly governments.” Khan added that he had spoken to Saudi Arabia's Crown Prince Mohammed bin Salman about boosting investment ties between the two countries.

Saudi Arabia's Energy Minister Khalid Al-Falih praised CEO of French energy giant Total, Patrick Pouyanne, for standing by Saudi Arabia in this difficult period.

"We see what partnership means when you have difficult times," Pouyanne responded as he shared the stage with Falih.

"This is when you really strengthen a partnership."

 

 

On the energy and investment panel, Al-Falih noted that global oil demand would hit 120 million barrels a day in the next few decades, and that the Kingdom could boost its crude production by 1-2 million barrels a day.

 

 

The world's media turned their attention to a future technology presentation when the Crown Prince and Jordan's King Abdullah II arrived.

 

At the session, Saudi Arabia's Minister of Communications and IT Abdullah Al-Sawahah said: "Saudi Arabia is moving at light speed in becoming the tech hub of the region."

Meanwhile, Emirati investor Mohamed Alabbar added: "There is so much room for technology growth in the Middle East, especially in Saudi Arabia, the UAE and the whole region."

The three-day FII event will likely see more investment partnerships from Russia and China being forged, as noted by Ellen Wald, president of the Transversal Consulting think-tank and author of the recent book “Saudi Inc,” with executives still looking to do business at the Riyadh meeting despite some having pulled out.

Click for more coverage of the event: Future Investment Initiative.

Topics: FII FII2018 Future Investment Initiative (FII) Future Investment Initiative 2018 Saudi Arabia Investment

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What changed in Saudi stocks on 1st day of foreign entry 

Updated 59 min 33 sec ago
AHMED Al-RASHEED - AL-EQTISADIAH 
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What changed in Saudi stocks on 1st day of foreign entry 

Updated 59 min 33 sec ago
AHMED Al-RASHEED - AL-EQTISADIAH 

RIYADH: Saudi Arabia’s stock market saw foreign non-strategic investors reduce their ownership in nearly half of the companies listed on the main Tadawul All Share Index, or TASI, on the first day of implementing the decision to open the market to all categories of foreign investors, according to Tadawul data reflecting ownership positions as of Feb. 1  

According to the Financial Analysis Unit at Al-Eqtisadiah, foreign ownership declined in 120 companies, increased in 97 others, and remained unchanged in the rest, with no variation in the number of shares held by foreign investors. 

Foreign investors favor growth stocks 

Looking at the changes purely through valuation multiples — without factoring in operational or sectoral considerations — foreign investors appear to be reallocating ownership toward growth stocks at the expense of value stocks, with higher multiples used as an approximate indicator of growth. 

Ownership declines were concentrated in companies with lower valuation multiples, where the median price-to-earnings ratio stood at about 17.1 times and the median price-to-book ratio was around 2 times. 

Conversely, ownership rose in companies with higher multiples, with a median price-to-earnings ratio of 23.3 times and a median price-to-book ratio of 2.6 times. 

Mid- and small-cap firms see biggest changes 

Raoom, Entaj, and Obeikan Glass saw the largest declines in foreign ownership, dropping between 10 percent and 16 percent. In contrast, Tamkeen, SACO, and Abo Moati led gains, with foreign stakes rising 10 to 20 percent. 

In terms of overall foreign ownership, Al-Babtain, Rasan, and Etihad Etisalat topped the list at roughly 34 percent, 29 percent, and 24 percent, respectively.

Gradual foreign inflow and delayed impact 

The initial changes remain insufficient to reflect a major impact of the full foreign access decision, especially as the first day coincided with the weekend. Additionally, entry is expected to be gradual until financial institutions are fully ready to open accounts, particularly for individuals. 

Mohammed Al-Shammasi, CEO of Derayah Financial, has told Asharq that the firm received around 500 individual investor applications on the first day of full foreign access. 

Meanwhile, foreign institutions managing under $500 million can now invest directly in the market with easier access, joining more than 4,000 qualified foreign investors who already hold assets worth SR377 billion ($100.5 billion) 

Topics: Tadawul CMA TASI

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