Complex Made Simple

Why Prince Alwaleed is reversing his “forever” policy?

* Prince Alwaleed said all of his stakes in public companies are potentially for sale

This reverses his earlier policy about his shareholdings being ‘forever’

Prince Alwaleed has shares in Citigroup, Apple, eBay and Twitter


Saudi billionaire prince Alwaleed Bin Talal said all of his stakes in public companies are potentially for sale, reversing a known policy about his prized shareholdings being “forever”.


All on the table

Speaking in an interview with Bloomberg TV, the prince said that “everything’s on the table.”

“If our interest requires Kingdom Holding to divest from any company, sure we’ll do it. There’s nothing called forever,” he added.

Through his investment firm, Kingdom Holding Co, Prince Alwaleed has held shares in Citigroup since 1991, shares in Apple Inc. for approximately 20 years, shares in eBay for the past 16 years and roughly five per cent shares in Twitter.

But why is he putting this option on the table at this time?


Saudi economy diversification push

Given the prince’s connections to the government and his expansive wealth, his investment activities can have an impact on the kingdom’s overall economy, it is speculated.

Slowing oil prices have sparked unprecedented social, political and financial reform in Saudi Arabia. Spearheaded by the Saudi Vision 2030, the country seeks to successfully transition into a non-oil era.

Most recently, the country also highlighted a set of sectors it is looking to push for in the near future. These include: automotives, pharmaceuticals and solar industries.


(More on Saudi Arabia’s latest economic push here)


The construction sector also has a high potential in Saudi Arabia. The cost of building has tumbled as much as 15 per cent, as cuts in state spending reduced the pressure on supplies for building materials and labour.

But the kingdom continues to struggle as a strong member of the Organization of Petroleum Exporting Countries (OPEC), negotiating along with other OPEC and non-OPEC members a much-needed control over global oil output, to avoid oversupply that would maintain the glut and continue to pressure prices downwards.

(IEA raises oil concerns for 2017)