Wall Street focuses on Saudi Arabia as deals entice CEOs

  • Business
  • Thursday, 25 Apr 2019

A group of large institutional investors including BlackRock Inc and Allianz SE's Pacific Investment Management Co has sued 16 major banks, accusing them of rigging prices in the roughly US$5.1 trillion-a-day foreign exchange market.

DUBAI: Some of the world’s leading financiers are returning to Saudi Arabia after the oil-rich kingdom yielded some of the year’s biggest merger and bond deals.

The arrival of top banking executives in Riyadh puts the finishing touches on a six-month charm offensive after their initial protests over the murder of government critic Jamal Khashoggi.

HSBC Holdings Plc’s chief executive officer John Flint and BlackRock Inc’s Larry Fink, who skipped a gathering of elites in the Saudi capital in the aftermath of the killing, are among speakers at a two-day financial conference, which started yesterday.

Khashoggi was murdered in October after entering the Saudi Consulate in Istanbul. Questions have centred on whether Crown Prince Mohammed bin Salman knew about or ordered the killing, a possibility US intelligence agencies consider likely, and whether the Trump administration would be willing to sacrifice its strategic partnership with Saudi Arabia to hold him accountable.

While the US has blacklisted 16 Saudi nationals for their role in the killing, the diplomatic crisis for business has proved to be little more than a blip. An about 40%t increase in oil prices since the start of the year has helped too.

“I don’t think the global investor community has ever shunned Saudi Arabia,” Jamal Al Kishi, Deutsche Bank AG’s chief executive officer for the Middle East and Africa, said in an interview with Bloomberg TV ahead of the conference.

“The attendance here, transactions being done for and in Saudi Arabia over the last few months, all indicate an unwavering commitment to the country and a very enduring appetite for Saudi Arabia and the risk profile it offers.”

Saudi Arabia has been home to some of the world’s hottest deals this year, as Europe and Asia have languished. JPMorgan Chase & Co, Morgan Stanley, HSBC, Citigroup Inc and Goldman Sachs Group Inc this month helped Saudi Aramco raise US$12bil of bonds in one of the most oversubscribed debt offerings in history.

Morgan Stanley and JPMorgan are also advising the oil firm on its US$69bil acquisition of local chemical giant Sabic. Spokesmen for Morgan Stanley, JPMorgan, HSBC and BlackRock all declined to comment.

JPMorgan’s Jamie Dimon, who also pulled out of last year’s meeting, will be represented by co-president Daniel Pinto, while Clare Woodman, Morgan Stanley’s head of Europe, the Middle East and Africa, will also address the gathering of Saudi government officials, business heads and international bankers. — Bloomberg

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