Saudi Arabia could raise more than 50 billion riyals (Dh48.96bn) from the sale of stakes in state-controlled entities over the next five years, its finance minister said.
The kingdom, the Arab world's biggest economy, is now looking to sell assets in sectors that were previously not targeted for privatisation such as healthcare and education as it looks to diversify its revenue base and bring more efficiency to state entities, Mohammed Al Jadaan said on Wednesday during a Bloomberg webinar.
"While amounts are quite healthy and significant, I would imagine in the next four to five years it would be north of 50 billion [riyals] only in the sale of assets,” he said. “The amount is not what is driving this [though].”
Saudi Arabia’s efforts to build water, power and sewage sector projects with private consortiums has been a “successful journey”, he said. It is earmarking more assets in the water sector for privatisation and plans to bring some of its “mature assets in [the] form of companies” to the capital market, he said.
“There are few of them that are in the pipeline for 2020-21. I can’t disclose them because some of them have filed with the regulator and a few of them are at an advance stage,” Mr Jadaan said.
Privatisation is a key plank of Saudi Arabia’s Vision 2030 economic diversification agenda. The kingdom raised close to $30bn (Dh110.1bn) from the sale of shares in Saudi Aramco, the world’s largest oil producing company. The listing last year on the Tadawul stock exchange was the biggest initial public offering in the world. Earlier this year, the kingdom sold a stake in two grain mills and two more assets are being offered to private investors in the same sector.
The kingdom, the world’s biggest oil exporter, like other Middle Eastern producers is facing a double whammy of lower revenue from sale of hydrocarbons and the pandemic-driven slowdown. The country has increased its rate of Value Added Tax to 15 per cent, from the previous 5 per cent, to offset the impact of lower crude prices and boost its revenue base.
Asked if the kingdom will consider levying income tax as a more effective way of boosting revenue, Mr Al Jadaan said all options are under consideration. However, imposing income tax would require "a lot of preparation" and is unlikely to be introduced in the immediate future.
The tripling of VAT, the minister said, does not mean the kingdom is in austerity mode or would be entering into a new phase of belt-tightening. The kingdom has not reduced expenditure and has continued to spend on the main programmes that are part of Vision 2030, with “slight adjustments”.
Saudi Arabia is closely monitoring all sectors of the economy and is ready to roll out more stimulus measures if required. The kingdom has so far launched 200 fiscal and monetary initiatives worth $65bn, targeting sectors including financial services and small and medium-sized enterprises.
He said July frequency data is encouraging, indicating economic recovery in the kingdom, although there are still many uncertainties. The International Monetary Fund expects Saudi Arabia’s economy to contract 6.8 per cent this year. However, Mr Al Jadaan said the kingdom does not agree with the fund's projection.
“We stand ready to support whatever support is needed,” for economic recovery, he said when asked if the kingdom could roll out more stimulus.
The kingdom's sovereign wealth fund, the Public Investment Fund (PIF), will also continue to invest at home and abroad as it looks to capitalise on some of the opportunities available in the market.
“We have no specific geographic preference,” Mr Al Jadaan, who is also on the board of PIF, said. “We have invested heavily in tech and we will continue to look at these investments.”
PIF, he added, would look at the option of secondary offerings of shares in its local asset portfolio to "recycle mature investments".
"That's not driven by need of liquidity, though – they have ample liquidity," he said.
The kingdom, which has raised about $12bn international debt capital markets this year, is likely to approach the market at least once more in 2020, but has yet to decide the timing and currency of issuance.
Riyadh has raised funds from local debt markets and has issued “significantly more than what we had planned at the beginning of the year”, he said.
RESULT
Huddersfield Town 1 Manchester City 2
Huddersfield: Otamendi (45' 1 og), van La Parra (red card 90' 6)
Man City: Agüero (47' pen), Sterling (84')
Man of the match: Christopher Schindler (Huddersfield Town)
Funk Wav Bounces Vol.1
Calvin Harris
Columbia
Squid Game season two
Director: Hwang Dong-hyuk
Stars: Lee Jung-jae, Wi Ha-joon and Lee Byung-hun
Rating: 4.5/5
MATCH INFO
Uefa Champions League semi-finals, first leg
Liverpool v Roma
When: April 24, 10.45pm kick-off (UAE)
Where: Anfield, Liverpool
Live: BeIN Sports HD
Second leg: May 2, Stadio Olimpico, Rome
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Zayed Sustainability Prize
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Top tips
Create and maintain a strong bond between yourself and your child, through sensitivity, responsiveness, touch, talk and play. “The bond you have with your kids is the blueprint for the relationships they will have later on in life,” says Dr Sarah Rasmi, a psychologist.
Set a good example. Practise what you preach, so if you want to raise kind children, they need to see you being kind and hear you explaining to them what kindness is. So, “narrate your behaviour”.
Praise the positive rather than focusing on the negative. Catch them when they’re being good and acknowledge it.
Show empathy towards your child’s needs as well as your own. Take care of yourself so that you can be calm, loving and respectful, rather than angry and frustrated.
Be open to communication, goal-setting and problem-solving, says Dr Thoraiya Kanafani. “It is important to recognise that there is a fine line between positive parenting and becoming parents who overanalyse their children and provide more emotional context than what is in the child’s emotional development to understand.”
House-hunting
Top 10 locations for inquiries from US house hunters, according to Rightmove
- Edinburgh, Scotland
- Westminster, London
- Camden, London
- Glasgow, Scotland
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The specs: 2018 Chevrolet Equinox
Price, base / as tested: Dh76,900 / Dh110,900
Engine: 2.0L, turbocharged in-line four-cylinder
Gearbox: Nine-speed automatic
Power: 252hp @ 5,500rpm
Torque: Torque: 352Nm @ 2,500rpm
Fuel economy, combined: 8.5L / 100km
UAE currency: the story behind the money in your pockets
The specs
Engine: 4-litre twin-turbo V8
Transmission: eight-speed PDK
Power: 630bhp
Torque: 820Nm
Price: Dh683,200
On sale: now
La Mer lowdown
La Mer beach is open from 10am until midnight, daily, and is located in Jumeirah 1, well after Kite Beach. Some restaurants, like Cupagahwa, are open from 8am for breakfast; most others start at noon. At the time of writing, we noticed that signs for Vicolo, an Italian eatery, and Kaftan, a Turkish restaurant, indicated that these two restaurants will be open soon, most likely this month. Parking is available, as well as a Dh100 all-day valet option or a Dh50 valet service if you’re just stopping by for a few hours.
What is blockchain?
Blockchain is a form of distributed ledger technology, a digital system in which data is recorded across multiple places at the same time. Unlike traditional databases, DLTs have no central administrator or centralised data storage. They are transparent because the data is visible and, because they are automatically replicated and impossible to be tampered with, they are secure.
The main difference between blockchain and other forms of DLT is the way data is stored as ‘blocks’ – new transactions are added to the existing ‘chain’ of past transactions, hence the name ‘blockchain’. It is impossible to delete or modify information on the chain due to the replication of blocks across various locations.
Blockchain is mostly associated with cryptocurrency Bitcoin. Due to the inability to tamper with transactions, advocates say this makes the currency more secure and safer than traditional systems. It is maintained by a network of people referred to as ‘miners’, who receive rewards for solving complex mathematical equations that enable transactions to go through.
However, one of the major problems that has come to light has been the presence of illicit material buried in the Bitcoin blockchain, linking it to the dark web.
Other blockchain platforms can offer things like smart contracts, which are automatically implemented when specific conditions from all interested parties are reached, cutting the time involved and the risk of mistakes. Another use could be storing medical records, as patients can be confident their information cannot be changed. The technology can also be used in supply chains, voting and has the potential to used for storing property records.
UAE currency: the story behind the money in your pockets
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
SPECS
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BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000