ENERGY: Saudi Arabia plans $110bn investment in Al-Jafurah gas field ...

ENERGY: Saudi Arabia plans $110bn investment in Al-Jafurah gas field
By Yasmine El Tohamy - Jeddah
Syndicated by: GEO´PRChannel - Málaga Technology Centre

Last September [2019] Saudi Arabia reached an important milestone in its Saudi Vision 2030 reform plan, which aims to diversify the Kingdom’s economy away from its petrochemical revenue base.

The country finalized its entry into the JP Morgan suite of emerging market (EM) indices. It was the
finale in a series of announcements by the major indexes, including MSCI, S&P and FTSE, confirming that Saudi Arabia met their inclusion criteria.

This is a testimony to the work of The Capital Markets Authority and Saudi Arabia’s stock exchange, Tadawul, which have driven the effort to modernize the Kingdom’s capital markets infrastructure and make it more investor friendly.

Saudi’s inclusion as an EM allows its entry to ETF’s, opening the country to billions of dollars-worth of outside investment, which would be otherwise closed to it. An example, $1.9 trillion tracks the MSCI EM Index alone of which 80 percent is active and 20 percent passive. Given this, Saudi Arabia’s 2.8 percent country weighting represents an additional $53 billion in foreign capital flows to the country.

Looking into 2020, there are several considerations investors should bear in mind. Foremost among these are oil prices and a concurrent slowdown in growth, regional geopolitical tensions and — a potential boon for investors — the rise of fintech in the region.

Oil prices have swung between $55 and $75 a barrel this year against a backdrop of slowing global growth, trade tensions and geopolitical risks. Steep oil production cuts — undertaken in a bid to push up prices — have acted as a further drag on growth, in addition to weak external demand.

Excerpt from an original report by:
Yasmine El Tohamy - Al Khaleej Today