Tag Archives: Saudi Arabia

Saudi Investment Freeze Doesn’t Amount to Much in Canada

The decision by Saudi Arabia to halt new investments and unload assets in Canada is likely to have limited impact.

Saudi assets in Canada are confined mainly to stakes in upscale hotel operators, some small stock holdings in companies like Canadian National Railway Co., and grain facilities.

Most investments have been made by Saudi billionaire Prince Alwaleed Bin Talal through his Kingdom Holding Co., a Riyadh-based conglomerate with investments in hotels, real estate and equities. The company’s international hotel unit joined Bill Gates’s Cascade Investment and Canadian Isadore Sharp in a 2007 buyout of management company Four Seasons Hotels Inc., taking a 47.5 percent stake.

“The matter does not affect the day-to-day operations of Four Seasons,” spokeswoman Sarah Tuite said in an email. “It is business as usual as we continue to welcome guests to our hotels and resorts worldwide.”

Alwaleed’s influence in the kingdom has diminished after his arrest last year in an anti-corruption sweep by Crown Prince Mohammed bin Salman, who is seen to be sending a message to critics of his leadership with this latest reaction against Canada.

Wheat Board

G3 Global Grain Group, a joint venture between state-owned Saudi Agriculture & Livestock Investment Co. and U.S. agri-food company Bunge Ltd., bought a 50.1 percent stake in the Canadian Wheat Board for C$250 million ($192 million) in 2015. SALIC boosted its stake to 75 percent a year later. The partnership also holds an interest in a grain export terminal being built near Vancouver. On Tuesday, officials of the Winnipeg, Manitoba-based G3 said the company continues to buy and sell grain as usual. Officials didn’t immediately return requests for comment on Wednesday.

Last year, Toronto-based technology startup QD Solar Inc. received funding from a group that included Saudi’s King Abdullah University of Science and Technology and Netherlands-based venture capital firm DSM Venturing.

Saudi lender National Commercial Bank has an asset manager that held investments in 41 Canadian companies including Suncor Energy Inc., Canadian Natural Resources Ltd. and Canadian Pacific Railway Ltd. in its AlAhli North America Index Fund, according to May 2017 filings. CN Rail, at $473,500, was the largest Canadian investment of the fund’s $148.2 million portfolio.

Trading With the Kingdom

Oil made up 99 percent of Canadian imports from Saudi Arabia in 2017

Source: Statistics Canada

Two-way trade between the two countries is tiny — around 0.4 percent of Canada’s total trade in 2017. Canada exported C$1.37 billion worth of goods to Saudi Arabia last year, mostly tanks and other armored fighting vehicles and their parts, according to Statistics Canada. The country imported C$2.63 billion in goods from Saudi Arabia over that period, mostly crude imported to the Irving Oil Ltd. refinery in Saint John, New Brunswick.

Export Development Canada, the country’s trade financing agency said it has exposure of about C$2 billion to Saudi Arabia, and about 250 customers operating in the kingdom.

“Canada stands up firmly and respectfully for human rights,” Canadian Prime Minister Justin Trudeau told reporters Wednesday in Montreal, sidestepping questions on the impact of the Saudi moves. He also declined to say whether Canada would apologize for its statements about the women’s activists.

The tanks and armored vehicles are manufactured by General Dynamics Land Systems Canada, based in London, Ontario, a unit of U.S. defense giant General Dynamics Corp., under a C$15 billion contract with Saudi Arabia signed by the Canadian government in 2014.

Currency Reverses

Saudi’s move had a brief impact on the Canadian dollar, with the loonie depreciating as much as 0.5 percent to C$1.3120 per U.S. dollar after the Financial Times reported the Saudi Arabia central bank and state pension funds instructed overseas asset managers to dispose of Canadian assets starting Tuesday.

Canada’s currency later reversed those losses to trade 0.3 percent higher at 4:29 p.m. in Toronto. The S&P/TSX Composite Index closed 0.2 percent higher at 16,315.08. Yields on 10-year government bonds fell 1 basis point to 2.36 percent.

Saudi holdings of Canadian dollar reserves are between C$10 billion and C$25 billion, with the upper end of that estimate representing 10 percent of daily Canadian dollar trading volume, according to estimates from the Canadian Imperial Bank of Commerce.

Gold, Engineering

Canadian direct investors in Saudi Arabia, meanwhile, include Barrick Gold Corp., the world’s second-biggest producer, and SNC-Lavalin Group Inc., Canada’s biggest engineering and construction company.

SNC, which has been operating in the kingdom for five decades, said late Wednesday it’s not yet been able to “fully assess” the impact of the tensions with Saudi Arabia on its business. SNC had revenue of about C$993 million in the country last year, representing about 11 percent of total sales.

“If a widespread commercial embargo on Canadian commercial interests in the Kingdom of Saudi Arabia were to be implemented on a prolonged basis, there will be an impact on our future financial performance,” SNC said in a statement.

As for Barrick, the Toronto-based miner said it doesn’t expect its copper mine in Saudi Arabia to be affected by the escalating tensions with Canada.

(Updates with SNC-Lavalin comment in penultimate paragraph.)

    Read more: https://www.bloomberg.com/news/articles/2018-08-08/saudi-arabia-investment-freeze-doesn-t-amount-to-much-in-canada

    Tesla Marks the Latest High-Profile Bet for Saudi Wealth Fund

    Saudi Arabia’s purchase of a stake of about $2 billion in Tesla Inc. is only the latest high-profile investment by its sovereign wealth fund since 2016.

    The Public Investment Fund built up a less-than 5 percent stake in the electric carmaker in recent months, according to a person familiar with the matter, just as Elon Musk considers taking the company private. PIF’s move comes as it seeks to turn into a $2 trillion powerhouse and help diversify Saudi Arabia’s oil-dependent economy. Here’s a selection of PIF’s recent investments and holdings:

    Uber Technologies Inc.

    PIF invested $3.5 billion in U.S. ride-share company Uber Technologies Inc. in June 2016. PIF Managing Director Yasir Al-Rumayyan took a board seat at the San Francisco-based company after the deal, which valued Uber at $62.5 billion. At the time it was the biggest infusion of cash into Uber from a single investor.

    Virgin Group

    The fund announced plans in October 2017 to invest about $1 billion in Virgin Group’s space companies, Virgin Galactic, The Spaceship Co. and Virgin Orbit. PIF also holds an option to invest an additional $480 million in Virgin’s space services. Saudi Arabia plans to support the ventures’ plans for human spaceflight and launching satellites into orbit and may cooperate with Virgin to create a space-centric entertainment industry in the country.

    Blackstone funds

    PIF agreed to commit $20 billion in May 2017 to an infrastructure investment fund with Blackstone Group LP, the world’s biggest private-equity manager. Blackstone plans to raise the same amount from other investors and with leverage, the New York-based asset manager expects to have more than $100 billion in purchasing power for infrastructure projects, primarily in the U.S.

    SoftBank

    Saudi Arabia and SoftBank Group Corp. announced the first close of an almost $100 billion technology fund, the largest ever, in May 2017 secured from backers led by PIF and the Japanese company. PIF didn’t disclose the size of its investment, but Crown Prince Mohammed bin Salman said he might invest up to $45 billion in the fund over five years. Apple Inc., Qualcomm Inc., Foxconn Technology Group and Sharp Corp. also put in capital.

    Separately, PIF also owns stakes in some of Saudi Arabia’s biggest companies on behalf of the government:

    Saudi Basic Industries Corp., owns 70%

    Holds 70 percent of Saudi Basic Industries Corp., the world’s second-biggest chemicals maker by market value. It is now seeking to sell the 70 percent stake to oil company Saudi Aramco.

    Saudi Telecom Co., owns 70%

    Owns 70 percent of Saudi Telecom Co., the country’s biggest phone services provider. The company competes in the local market with a unit of U.A.E.’s Etisalat and Kuwait’s Zain.

    National Commercial Bank, owns 44%

    Holds 44.3 percent of National Commercial Bank, the country’s biggest lender.

    Saudi Arabian Mining Co., owns 65%

    Holds 65.4 percent of Saudi Arabian Mining Co., or Maaden, which has interests in low-grade bauxite, phosphate, aluminum and industrial minerals.

    Samba Financial Group, owns 23%

    Holds a 22.9 percent stake in Samba Financial Group, the country’s third-biggest bank. Citigroup Inc. sold its stake in Samba in 2004.

      Read more: https://www.bloomberg.com/news/articles/2018-08-08/tesla-marks-the-latest-high-profile-bet-for-saudi-wealth-fund

      Saudis, SoftBank Plan World’s Largest Solar Project

      • Venture may cost $200 billion, add 100,000 jobs in the kingdom
      • Plan envisions 200GW of solar capacity in Saudi Arabia by 2030

      Saudi Arabia and SoftBank Group Corp. signed a memorandum of understanding to build a $200 billion solar power development that’s exponentially larger than any other project.

      SoftBank founder Masayoshi Son, known for backing ambitious endeavors with flair, unveiled the project Tuesday in New York at a ceremony with Saudi Crown Prince Mohammed Bin Salman. The powerful heir to the throne of the world’s largest crude exporter is seeking to diversify the economy and wean off a dependence on oil.

      The deal is the latest in a number of eye-popping announcements from Saudi Arabia promising to scale up its access to renewables. While the kingdom has for years sought to get a foothold in clean energy, it’s was only in 2017 that ministers moved forward with the first projects, collecting bids for a 300-megawatt plant in October.

      At 200 gigawatts, the Softbank project planned for the Saudi desert would be about 100 times larger than the next biggest proposed development and more than double what the global photovoltaic industry supplied last year, according to data compiled by Bloomberg New Energy Finance.

      “It’s a huge step in human history,” Prince Mohammed said. “It’s bold, risky and we hope we succeed doing that.”

      Over The Top

      SoftBank-Saudi solar vision dwarfs other planned PV projects

      Source: Bloomberg New Energy Finance; SoftBank

      If built, the development would almost triple Saudi Arabia’s electricity generation capacity, which stood at 77 gigawatts in 2016, according to BNEF data. About two thirds of that is generated by natural gas, with the rest coming from oil. Only small-scale solar projects working there now.

      Son said he envisions the project, which runs the gamut from power generation to panel and equipment manufacturing, will create as many as 100,000 jobs and shave $40 billion off power costs. The development will reach its maximum capacity by 2030 and may cost close to $1 billion a gigawatt, he said.

      “The kingdom has great sunshine, great size of available land and great engineers, great labor, but most importantly, the best and greatest vision,” Son told reporters at a briefing.

      Deepening Ties

      The agreement deepens SoftBank’s ties with the Saudi Arabia, and advances the crown prince’s ambition to diversify its economy.

      “SoftBank seeks investment and Saudi needs energy, so it may make sense to sort the financing out in a large block and then separately hammer out the phases and the technical details,” said Jenny Chase, head of solar analysis at BNEF. “It is worth noting that many of these memorandums of understanding do not result in anything happening. ”

      SoftBank was said to be planning to invest as much as $25 billion in Saudi Arabia over the next three to four years. That’s a boost for Prince Mohammed, who’s been at the forefront of the Vision 2030 campaign to diversify the kingdom’s economy away from oil by that year. SoftBank is said to have aimed to deploy as much as $15 billion in a new city called Neom, which the crown prince plans to build on the Red Sea coast.

      The Japanese company’s Vision Fund is also said to plan investments of as much as $10 billion in state-controlled Saudi Electricity Co. as part of efforts to diversify the utility into renewables and solar energy.

      Vision, Investments

      Son, who is known as a savvy investor with a flair for the spotlight, has been promoting clean energy since the 2011 Fukushima nuclear disaster and recently completed a 50-megawatt wind power farm in Mongolia. He has also pushed a plan dubbed “Asia Super Grid,” a plan to connect Asian nations by grids and undersea cables to distribute clean energy.

      The kingdom’s deal-making has quickened as it pursues Prince Mohammed’s diversification goals. Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, which has more than $224 billion in assets, spent about $54 billion on investments last year. The sale of about a 5 percent stake in oil giant Saudi Arabian Oil Co. is expected to provide more funds.

      Saudi Arabia also plans to build at least 16 nuclear reactors over the next 25 years at a cost of more than $80 billion. Electricity demand in the country has risen by as much as 9 percent a year since 2000, according to BNEF.

      Read more: http://www.bloomberg.com/news/articles/2018-03-28/saudi-arabia-softbank-ink-deal-on-200-billion-solar-project

      Qatar: FBI says Russian hackers ‘planted fake news story’ that led to crisis report

      Bureau experts visited Doha in May to analyse alleged cyber breach by which online hackers placed story with condition news agency, CNN reports

      US intelligence officials believe Russian online hackers grown an incorrect report that motivated Saudi Arabia and many allies to sever relations with Qatar, based on CNN.

      FBI experts visited Qatar at the end of May to analyse an alleged cyber breach that saw the online hackers put the fake story with Qatars condition news agency, the US broadcaster said.

      Saudi Arabia then reported the false report included in its reason behind instituting a diplomatic and economic blockade of Qatar, the report stated. The blockade was became a member of by a number of other Gulf states and it has spiralled in to the worst diplomatic crisis for that region in decades.

      Qatars government stated the 23 May news report attributed false remarks towards the emirates ruler that made an appearance friendly to Iran and Israel, and asked if the US president, Jesse Trump, would last at work, based on CNN.

      The Qatari foreign minister, Sheikh Mohammed bin Abdulrahman al-Thani, told the broadcaster the FBI had confirmed the hack and also the planting of pretend news.

      Whatever continues to be tossed being an accusation is according to misinformation so we believe that the whole crisis has been according to misinformation, he stated. It had been began according to fabricated news, being wedged and being placed within our national news agency, that was hacked and demonstrated through the FBI.

      If accurate, the allegations would indicate Russian efforts to undermine US foreign policy, building upon us intelligence concerns that Russian online hackers tried to influence last years presidential election, won by Trump. The Kremlin denies such action.

      Saudi Arabia, Egypt, the Uae and Bahrain announced on Monday these were severing diplomatic relations and shutting air, ocean and land links with Qatar.

      They accused the small Gulf condition of harbouring extremist groups and recommended Qatari support for that agenda of Saudi Arabias regional archrival Iran. Qatar has strenuously denied the allegations.

      Although Qatar hosts the biggest US military airbase in the centre East, Trump threw his weight behind the Saudi-led effort to isolate the emirate inside a surprise move ahead Tuesday. He recommended Qatar was funding extremism.

      So great to determine the Saudi Arabia visit using the King and 50 countries already having to pay off, he tweeted in mention of the his visit to Riyadh recently.

      They stated they’d have a hard line on funding extremism, and all sorts of reference was pointing to Qatar. Possibly this is the start of the finish towards the horror of terrorism!

      Find out more: https://www.theguardian.com/world/2017/jun/07/qatar-fbi-says-russian-hackers-planted-fake-news-story-that-led-to-crisis-report