Saudi Arabia outpaces Asian giants with $18bn foreign equity inflow

Saudi investors monitor stocks at the recently opened exchange market department at the National Commercial Bank in Riyadh. (AFP)
Updated 29 August 2019

Saudi Arabia outpaces Asian giants with $18bn foreign equity inflow

  • Saudi Arabia has attracted $18 billion in foreign equity inflows so far this year
  • MSCI added Saudi stocks to its emerging markets index in June

LONDON: Saudi Arabia became the top equity investment destination among emerging markets this summer according to the Institute of International Finance (IIF)

Supported by its upgrade to emerging market status, Saudi Arabia has attracted $18 billion in foreign equity inflows so far this year, the IIF said.

“The inclusion of local stocks to broad equity benchmarks acknowledges the progress made by Saudi Arabia in reforming its capital
market system,” the institute said in its latest report.

FASTFACT

$4.5 bn

Saudi Arabia attracted more than $4.5 billion in foreign equity inflows in May and $2 billion in the first three weeks of August.

MSCI added Saudi stocks to its emerging markets index in June, while the index will complete the upgrade by the end of August.

“We expect the second phase of the upgrade to attract an additional $5 billion in equity inflows,” IIF said. While the ongoing trade war between the US and China negatively impacted investment flows to some emerging markets in recent months, Saudi Arabia bucked the overall bearish trend.

The Kingdom attracted more than $4.5 billion in foreign equity inflows in May, and $2 billion in the first three weeks of August, it said.

The inclusion of Tadawul-listed shares to both the MSCI and FTSE emerging market indexes has attracted billions of dollars from global investment funds this year.


Huawei in early talks with US firms to license 5G platform: executive

Updated 19 October 2019

Huawei in early talks with US firms to license 5G platform: executive

  • Currently there are no US 5G providers and European rivals Ericsson and Nokia are generally more expensive
  • Huawei has spent billions to develop its 5G technology since 2009

WASHINGTON: Blacklisted Chinese telecoms equipment giant Huawei is in early-stage talks with some US telecoms companies about licensing its 5G network technology to them, a Huawei executive told Reuters on Friday.
Vincent Pang, senior vice president and board director at the company said some firms had expressed interest in both a long-term deal or a one-off transfer, declining to name or quantify the companies.
“There are some companies talking to us, but it would take a long journey to really finalize everything,” Pang explained on a visit to Washington this week. “They have shown interest,” he added, saying conversations are only a couple of weeks old and not at a detailed level yet.
The US government, fearing Huawei equipment could be used to spy on customers, has led a campaign to convince allies to bar it from their 5G networks. Huawei has repeatedly denied the claim.
Currently there are no US 5G providers and European rivals Ericsson and Nokia are generally more expensive.
In May, Huawei, the world’s largest telecoms equipment provider, was placed on a US blacklist over national security concerns, banning it from buying American-made parts without a special license.
Washington also has brought criminal charges against the company, alleging bank fraud, violations of US sanctions against Iran, and theft of trade secrets, which Huawei denies.
Rules that were due out from the Commerce Department earlier this month are expected to effectively ban the company from the US telecoms supply chain.
The idea of a one-off fee in exchange for access to Huawei’s 5G patents, licenses, code and know-how was first floated by CEO and founder Ren Zhengfei in interviews with the New York Times and the Economist last month. But it was not previously clear whether there was any interest from US companies.
In an interview with Reuters last month, a State Department official expressed skepticism of Ren’s offer.
“It’s just not realistic that carriers would take on this equipment and then manage all of the software and hardware themselves,” the person said. “If there are software bugs that are built in to the initial software, there would be no way to necessarily tell that those are there and they could be activated at any point, even if the software code is turned over to the mobile operators,” the official added.
For his part, Pang declined to predict whether any deal might be signed. However, he warned that the research and development investment required by continuously improving the platform after a single-transfer from Huawei would be very costly for the companies.
Huawei has spent billions to develop its 5G technology since 2009.