EVENT LURES GLOBAL FUND MANAGERS TO SAUDI

The first Saudi Financial Sector Conference, held on 25 and 26 April in Riyadh, was a resounding success with regional and international financial powerhouses from all over the world attending the event and participating in various panels.

The conference showcased the kingdom’s Financial Sector Development Program (FSDP), which is part of the overarching Saudi Vision 2030.

“The plans being implemented under the umbrella of the Financial Sector Development Program will develop an advanced capital market that promotes financial planning, education and inclusion, stimulates savings and diversifies funding sources,” said Mohammed bin Abdullah Al-Jadaan, minister of finance and chairman of the Financial Sector Development Program Committee.

The event was organised by the Ministry of Finance, the Saudi Arabian Monetary Agency and the Capital Markets Authority.

Aptly titled “Promising Financial Prospects”, the conference aimed to become the region’s most prominent financial sector event and attract global and regional financial institutions to the kingdom.

“It seeks to increase the Saudi financial sector’s contribution to GDP by building a diversified and stable financial sector and developing a sophisticated financial market, through inviting all concerned stakeholders in the Saudi financial sector to participate in a constructive dialogue,” according to the organisers.

HSBC CEO John Flint and Blackrock CEO Larry Fink were among the major global executives in attendance, as was Daniel Pinto, co-president of JPMorgan Chase & Co.; Hiroshi Nakamine, managing executive officer in Europe and the Middle East at Mizuho Bank of Japan; Jun Ohta, CEO of SMBC Japan, and Mark Cook, CEO of UK-based Ashmore Group, also attended the event.

“This is an economy that we have a lot of confidence in, I think the future is bright,” Flint told the gathering. “We are excited about the role that we can continue to play here.”

Blackrock’s Fink told another panel: “The changes here in the kingdom in the last two years are pretty amazing.”

At the event, Saudi Arabian General Investment Authority (SAGIA) launched Venture by Invest Saudi, a new initiative aimed at attracting global venture capital firms to the kingdom.

“The economic and social transformation of Saudi Arabia is taking place at a rapid pace, guided by Vision 2030,” said Sultan Mofti, SAGIA’s deputy governor of investment attraction and development.

“The continued prosperity of the kingdom depends on fostering innovation, attracting foreign investment and enabling private sector growth. Across the globe, venture capital firms are key to nurturing entrepreneurship, promoting innovation, and unlocking value.”

The new initiative looks to offer an ‘instant license’ in under three hours, enabling companies to more easily tap into the Saudi market.

To date, more than 20 venture capital firms have signed agreements under the “Venture by Invest Saudi” platform, including those from the United States, the United Kingdom, China, Singapore, and Kuwait.

The conference underscores the ambition of the financial sector development programme, which is expected to transform the financial services sector into an engine of growth. Funding and investment will be needed to realise the goals and targets of the Saudi Vision 2030 programme.

The programme’s three pillars are to: (1) enable financial institutions to support private sector growth, (2) develop an advanced capital market, and (3) promote and enable financial planning for the local population and create a culture of savings and investment.

“The programme's initiatives aim to raise households’ savings from total income from x% to 10% by 2020, increase the total size of financial assets in the kingdom to GDP by 201%, increase the number of adults who have bank accounts from 74% to 80%, increase SME’s share of total bank loans to 5%, and generate more high-paying jobs in the financial sector, by 2020,” according to an FDSP document.

In its short time, FDSP has a number of achievements under its belt. Apart from opening the kingdom’s bonds and sukuk market, it has also enhanced the Mada’s system of point-of-sales payments to improve customer experience through the acceleration of time needed to execute a small-amount transaction, in addition to enhancing the smart payment infrastructure of the kingdom.

The Capital Markets Authority also issued a resolution to adopt and publish rules for registering auditors for entities subject to CMA’s supervision, while the Saudi Arabian Monetary Authority issued licensing and control rules for insurance/reinsurance companies in the country.