Thursday 24th August 2017
NEWS TICKER August 23rd: The overarching theme of this week will inevitably be geopolitics as US/South Korean military exercises and a new ‘strategic’ approach to troop deployments in Afghanistan take some of the heat out of last week’s fever over the US president’s inflammatory remarks over the Charlottesville rally. However, given this backdrop, this is now an important week in the Trump presidency; more so perhaps than last week as new geostrategic and financial imperatives mount for the US. Important negotiations over US debt levels, tax reform, and the government budget, among a growing list of legislative imperatives are now imminent as senators and congressman slowly seep back into Washington. Moreover, the heavily nuanced and tricky diplomacy required to absorb and accommodate even relatively small shifts in the power balance in the Asia-Pacific region that could impact relations with global peers (Russia and China) and the safety of two important US allies (South Korea and Japan) require calm heads and a significant upgrade in the quality of decisions and statements emanating from the White House. President Trump is expected to make a speech to the nation this evening outlining his thoughts. An interesting week ahead. Red was the predominant colour in Asian index benchmark charts following the Asian session today. Henry Croft, analyst at Accendo Markets noted, “Asian markets [traded] predominantly lower as tensions in the Korean peninsula dampen wider risk sentiment, while corporate results in Hong Kong [helped] its Hang Seng index to outperform in the region. Japan’s Nikkei and Australia’s ASX are both 0.4% lower, with poorly received results for Bluescope Steel (-20%) weighing on the latter.” Unless tensions are diffused quickly, it is unlikely to be a great week for stock markets wherever they may be. Real estate investment trusts gained slightly today the Tawadul (Saudi Arabia's), a day before the listing of a new trust, but as elsewhere bourses in the region were generally sluggish, especially Qatar. Geopolitical considerations aside, investors will also be eyeing key events later this week, including the US Federal Reserve’s annual symposium at Jackson Hole taking place over the course of three days from Thursday onwards. In other bellwether markets, crude iil has maintained Friday’s gains after widespread short covering on Friday prompted a sharp move higher. Brent crude has held above $52.50 while its US counterpart trades just shy of $48.50. Oil prices were steady early on Monday morning, searching for a catalyst for direction while OPEC is holding a meeting of its Joint OPEC-Non-OPEC Technical Committee (JTC) today in Vienna, which monitors the cartel and friends’ compliance with the output cuts. In its latest Monthly Oil Market Report, OPEC said oil output was up by 172,600 bp/d in July over June, to touch 32.8m barrels, pushed up by increased output from Libya, Nigeria, and Saudi Arabia. Elsewhere, gold ticked higher overnight after falling to $1280, its lowest level since Wednesday’s sharp rally following the Barcelona terror attacks. In some good news for investors this week, according to Janus Henderson, global dividends look to have touched an all-time high in Q2, on the back of a 5.4% annual increase. The asset management firm raised its forecast for dividend payments to a record $1.028trn, up by $50bn on its January forecast. Dividend payments rose in almost every country, excepting the UK, due to last year’s currency devaluation reports the firm -

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Saudi Arabia sets out privatisation blueprint

Wednesday, 02 August 2017
Saudi Arabia sets out privatisation blueprint The National Center for Privatization & PPP (NCP), the newly formed agency created to empower Saudi Arabia’s private sector, alongside the Supervisory Committees (SCs) established to manage each privatisation sector, has set out a blueprint to ensure the efficient and strategic transfer of the Kingdom’s government assets to the private sector.

The National Center for Privatization & PPP (NCP), the newly formed agency created to empower Saudi Arabia’s private sector, alongside the Supervisory Committees (SCs) established to manage each privatisation sector, has set out a blueprint to ensure the efficient and strategic transfer of the Kingdom’s government assets to the private sector.

Saudi Arabia’s Council of Ministers announced the establishment of the SCs yesterday, and these were given a definitive mandate to function as executive facilitators for multiple sectors which are to be privatised over the next 10 years. The sectors included in the Vision 2030 under the privatization program are: environment, water and agriculture; transport; energy, industry & mineral resources; labour and social development; housing; education; health; municipalities, telecommunication and information technology, and the Hajj & Umrah sectors.   

Each committee will assess the technical, financial, legal and regulatory landscape and to establish a best practice blueprint for the privatisation of the targeted entities. The ministry of finance, a permanent member in all the SCs, will also play a crucial role in the privatisation process. 

NCP will serve as a permanent member of all SCs, providing strategic guidance and support as the committees move to enhance Saudi Arabia’s economy by recruiting private sector participation through asset privatisation and the formation of new public-private partnerships. It is expected that the privatisation programme will increase the private sector’s contribution to national GDP from 40% to 65%.

NCP and the SCs are the first entities of their kind in the MENA region. “NCP has adopted a wide-ranging governance policy that will enable government agencies and hold each accountable as we move forward with stimulating private investment and privatisation,” explains Turki Al Hokail, chief executive of the NCP.

Among its key tasks, NCP will formulate regulations, create privatisation frameworks and prepare robust processes that will serve as a blueprint for agencies and entities to follow that will ensure the efficient sale of Saudi assets and to drive the privatization process forward, he explains. “We will facilitate the smooth transfer of assets by publishing a blueprint that will deepen communication channels between government agencies, citizens and the private sector locally, regionally & internationally and serve to guide investors and participating agencies and entities through the privatisation process,” he says.

NCP will work with the sectors targeted for privatisation to ensure their technical and financial readiness. “Effective governance means integrating a continuous evolution of improvement to keep pace with the rising accountability and transparency expected of government. NCP will serve as an agile, performance-oriented public organization that will boost performance and increase investment opportunity in the Kingdom,” adds Al Hokail.