Saudi Arabia - visit of the lord mayor of London
Published 29 January 2015
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0.1 This publication was archived on 5 August 2016.
This article is no longer current. Please refer to Overseas Business Risk - Saudi Arabia.
0.2 Summary
Valuable visit by the Lord Mayor nurtures key relationships while focusing on UK expertise in financial and advisory services. Packed programme included calls on the Governor of Riyadh, Minister of Economy and Planning and meetings with top interlocutors at Saudi Arabia’s key economic and financial institutions. Particular recognition of the value of UK training and qualifications. Saudis would welcome greater UK commercial activity which increases diversification.
0.3 Detail
The Lord Mayor of the City of London, Alderman Alan Yarrow, visited Riyadh on 19-20 January, accompanied by Sheriff Fiona Adler and a business delegation drawn from the UK financial services community, who were able to attend the full programme. The visit commenced with a reception held at the Residence, attended by senior members of the Saudi financial services and business community and where we promoted the upcoming Global Law Summit.
Programme
The Governor of Riyadh referred warmly to UK-Saudi cooperation UK initiated following last year’s Lord Mayoral visit, covering transport and security (the ring of steel). The Lord Mayor confirmed the UK’s willingness to help Saudi Arabian economic diversification in financial services and beyond, in particular drawing attention to UK capability in training and qualifications. The Governor welcomed the prospect of closer cooperation and more British companies operating in Saudi Arabia, which he said now had an improving investment climate, cornerstones of which included relevant laws and regulations and our judiciary. As a regular visitor to London, he particularly praised the way that London retained attractive traditional buildings as well as incorporating the most modern architecture and infrastructure. The Lord Mayor later met the Governor of the Saudi Public Pensions Agency and toured their top investment site, the impressively modern King Abdullah Financial District (also known as Riyadh’s Canary Wharf), the first phase of which will open in summer 2015, with six major office and residential towers, a mosque and a conference centre.
At the Public Investment Fund (PIF), the Lord Mayor and delegation explored the basis of PIF investments. The Assistant Secretary General (ASG) explained that his organisation was the “arm of the government in the private sector”, acting as a government incubator for diverse Saudi industrial and infrastructure concerns, and holding company for over 150 different firms, including specialist sub-funds such as technology incubator TAQNIA and investment fund Sanabil, 100% of Saudi Railways, and 70% of SABIC (petrochemical giant and the largest listed firm in the Middle East). PIF had no immediate plans to divest itself of major infrastructure, but followed Saudi government policy, with a very long-term intention of moving the assets to the private sector.
Exchanging views on the current international economic climate with Vice Governor of the Saudi central bank, the Saudi Arabian Monetary Agency (SAMA), and later with Minister of Economy and Planning the Lord Mayor noted that current downward pressures on global growth were eased by the fall in oil prices by over 50%, easing inflation in consumer countries and promoting a quicker return to increased global growth.
SAMA said that Saudi banks, with their relatively conservative approach and “plain vanilla” products , had not suffered the loss of capital or trust experienced by many global financial institutions, but SAMA was nonetheless working on a Banking Vision 2020, with aims which included drawing more younger Saudis into the industry and improving savings levels across the country. The Minister of Economy and Planning was concerned to accelerate greater entrepreneurship in Saudi Arabia, which he said was moving in the right direction.. The Lord Mayor highlighted to both interlocutors the contribution which could be made by UK partners, and training and advisory services.
At the Capital Markets Authority (CMA), the Chairman looked forward to the opening of the Saudi Stock Exchange (Tadawul) to Qualified Institutional Investors, on track for summer 2015. There would be no opening to international private investors, and no current plans for a Saudi second market. The Chairman was pleased with cooperation with UK training institutions, and open to further UK involvement and advice in technology provision. He would next be in London in June 2015 for the IOSCO conference.
0.4 Comment:
This very valuable visit reinforced the bilateral relationship in the key economic sphere. While the Lord Mayor individually changes every year, senior Saudis in the economic arena well understand the importance of the ongoing relationship with The City, and the annual visit is welcomed by all.
The Lord Mayor’s visit highlighted once again Saudi Arabia’s position as the largest economy and pool of wealth in the Middle East, with by far the largest capital markets. While UKTI’s seven HVOs in Saudi Arabia do not include financial services, it remains a priority sector and Saudi Arabia remains key to the development of UK financial services in the Middle East, and wider UK prosperity goals. As well as numerous contacts made for follow-up in the financial sector, on this visit UK successes and ongoing cooperation were celebrated in education and training, technology and security, and further opportunities identified included education, energy and legal advisory services.
0.5 Disclaimer
The purpose of the FCO Country Update(s) for Business (”the Report”) prepared by UK Trade & Investment (UKTI) is to provide information and related comment to help recipients form their own judgments about making business decisions as to whether to invest or operate in a particular country. The Report’s contents were believed (at the time that the Report was prepared) to be reliable, but no representations or warranties, express or implied, are made or given by UKTI or its parent Departments (the Foreign and Commonwealth Office (FCO) and the Department for Business, Innovation and Skills (BIS)) as to the accuracy of the Report, its completeness or its suitability for any purpose. In particular, none of the Report’s contents should be construed as advice or solicitation to purchase or sell securities, commodities or any other form of financial instrument. No liability is accepted by UKTI, the FCO or BIS for any loss or damage (whether consequential or otherwise) which may arise out of or in connection with the Report.