Crown Prince Takes Decision-Making Power Over Saudi Arabia's Biggest Businesses

Larry Hoffman
March 14, 2018

Saudi Arabia's economy is heavily reliant on its fossil fuel industry, and the crown prince is trying to modernize and diversify the economy.

The new departments will be directly linked to attorney general Sheikh Saud Al Mojeb and seek to "combat corruption in all its forms and with the aim of protecting the country and its resources", according to the official Saudi Press Agency.

The initial public offering (IPO) of shares in the Saudi Arabian state-linked corporation would be the biggest yet in the world.

In an interview last week, Saudi Arabia's energy minister, Khalid al-Falih, hinted that an Aramco offering would probably come next year, asserting that the timeline would make little difference.

Saudi Aramco's listing is now expected in the first or second quarter of 2019. The Aramco stake sale is part of the plan, the proceeds from which are expected to be partially used for the diversification. She added, "When considering the scale of the market, our analysis tells us that there's an opportunity to increase the number of driving institutions in the kingdom by over 5o%, an increase that will be translated into job opportunities for our women".

Experts understand that Amazon has identified Saudi Arabia as an increasingly important emerging market, and is looking to expand in the Middle East.

But in the shorter-term, Saudi Arabia and other oil-producing countries have been hit by the fall in the price of crude oil, partially a result of wider and cheaper availability of alternative fuels.

Citing sources close to the process, Reuters on Tuesday reported that the chances of an worldwide initial public offering, or IPO, are hanging in the balance. The visas will need to be attested by the Saudi Commission for Tourism and National Heritage, which means you will still need to book through a registered tour operator in the country to obtain the visa, according to the tour company Abercrombie & Kent, which already takes visitors to Saudi Arabia under existing visa rules.

According to MSCI, US$1.7 trillion of assets were benchmarked against MSCI emerging market indexes at the end of June a year ago, of which about a fifth was from passive investors.

Al-Abadi revealed the news saying: "I have received a phone call from the King of Saudi Arabia, Salman bin Abdul Aziz".

We are all well aware of the gifts that are sometimes showered on a country's global players after they have been successful, but a recent victory by Iraq XI over Saudi Arabia 4 - 1 in a friendly match has led to a remarkable bonus for football in Iraq.

Saudi's Bin Salman is believed to favor listing in NY, while officials, including Energy Minister Khalid al-Falih, reportedly favor London.

"Appropriate decisions will be made in due course". It is believed that Saudi preparedness for a simultaneous flotation is not yet where it needs to be for a 2018 listing.

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