Saudi Crown Prince Mohammed bin Salman is being touted as the most powerful man in the region.
Two new significant business developments are making headlines to reinforce that fact.
But as he prepares for an upcoming trip to London, Paris and the US, he has the daunting task of convincing western leaders that the Saudi anti-corruption purge was just that: a purge and not a power grab.
Not everyone is convinced.
The Guardian said that UK Premier Theresa May is expected to welcome Saudi Arabia’s crown prince Mohammed bin Salman in the coming weeks.
“Dispiritingly it has been reported that City rules are being bent to secure the flotation of a $100bn slice of Saudi Arabia’s national oil company (ARAMCO),” said the daily.
“Britain should not trade away its principles and values. The crown prince’s anti-corruption crackdown is clearly less about graft than a purge of royal rivals.”
The Saudi attorney general said 56 people remained in custody and could face formal charges.
The US trip on the other hand looks more promising.
Al-Monitor said Saudi is organizing the crown prince’s first US visit since he became crown prince last year, with a long tour starting in early March, with possible stops in Washington, Boston, San Francisco, New York and Houston.
It said the crown prince is close to Donald Trump’s son-in-law and senior adviser Jared Kushner.
“Mohammed’s tour appears aimed at convincing Western officials that his self-described anti-corruption purge is making Riyadh safe for business,” Al-Monitor said.
“In New York, he’s expected to address the possibility of listing state oil company Saudi Aramco on the New York Stock Exchange.”
The initial public offering will be the world’s biggest-ever share sale.
Aramco President and CEO Amin Nasser recently told CNBC his company is ready for the IPO this year, but is waiting on the government to choose an international list venue.
Last year the crown prince visited Facebook CEO Mark Zuckerberg and announced a $3.5bn investment in the Uber ride-hailing service during a 2016 trip to San Francisco.
Big news ahead of the event pave the way forward.
CNBC said Google parent Alphabet and Aramco are in talks to build a tech hub in Saudi, quoting a Wall Street Journal (WSJ) report.
Alphabet and Aramco have discussed forming a joint venture that would build data centers around the kingdom, sources familiar with the matter tell the Journal.
“It remains to be seen which customers the data centers would serve and how large the joint venture would be, but it could be listed in the Saudi stock exchange,” the sources said.
The talks have been ongoing for months and have involved Alphabet CEO Larry Page, the Journal reports.
“Amazon, one of the leaders in the cloud computing industry, is also reportedly in the mix. Sources tell the Journal it could soon sign a $1 billion deal to build three data centers in Saudi Arabia, with the deal expected to be announced during Salman’s anticipated visit to the United States, a significant step toward diversification,” WSJ said.
Most powerful man in ME
CNBC said that this news is the latest and perhaps the most solid evidence that the Saudi Crown Prince is not only the most powerful man in Saudi Arabia, but now clearly the most powerful man in the entire Middle East.
“That’s because he’s not only gained more control over his own country but doing so has made Saudi Arabia more powerful both politically and financially,” said CNBC.
The LA Times said that Saudi stocks have made up nearly all of the ground lost when the detentions were made public.
“President Trump has gone out of his way to cultivate friendly ties with the Saudis and the surprise crackdown was seen as having at least the tacit approval of the president, who said early on that Prince Mohammed knew what he was doing,” said the LA Times.
Trump’s son-in-law and advisor, Jared Kushner, has visited Saudi Arabia several times, reportedly forging a close personal rapport with the prince, it added.
“Of course, these talks with America’s tech titans would not have been possible without all the major moves bin Salman made first. Improving the nation’s security, finances, rights for women, and toning down Islamist rhetoric, all go a long way to making the kingdom a more attractive place to invest,” said CNBC.
Funds flowing to Saudi
Reuters reported last Wednesday that Middle East fund managers expect to pump more money into Saudi Arabian equities in coming months, a poll showed.
“The monthly poll of 13 leading regional fund managers, conducted in the past week, found 69 percent expect to raise allocations to Saudi Arabia within a regional equities portfolio over the next three months, and none to cut allocations,” said Reuters.
Fund managers cited expectations that Saudi Arabia will join emerging market equity indexes, which would attract billions of dollars of fresh money to the country.
“MSCI will announce its decision this June on whether to label Saudi Arabia an emerging market, while FTSE will make a decision in March. Actual inclusion in the indexes would only occur months later — in May 2019, in the case of MSCI — but positive decisions could buoy the market immediately,” said Reuters.
The poll confirmed that Saudi Arabia’s crackdown on corruption has done little to hurt the interest of portfolio investors in the country.