Finance & Capital Market

Saudi Arabia eyes $4bn more bond issue this year

Saudi Finance Minister Mohammed Al-Jadaan said the country could borrow another $4 billion more this year and is considering debt in euros, riyals as well as sukuk. 
His comments to Bloomberg Television follow this week's successful $5 billon eurobond. The bond issue generated $23 billion of orders. 
Speaking with Bloomberg Television's Francine Lacqua at the World Economic Forum's annual meeting in Davos, Switzerland, he said he is “very confident” that the Saudi economy is picking up. 
“Yesterday showed very clearly that demand for Saudi credit is very high and very healthy. We are very pleased not only with the level of debt but also the pricing,” he said.
"I think Saudi Arabia has made it clear they are going through a well-articulated strategy in terms of going to the debt market, whether international or local. Investors have really started pricing Saudi in the right way. We reduced the pricing significantly compared to the last year’s issuances."
He also said the kingdom is starting to see the results of Vision 2030. "The numbers are proving that reform is working. We are basically cashing on the successes," said Al-Jadaan.
Asked if he is worried that the decline in government spending will impact the non-oil economy, Al-Jaddan said: "Not at all, government expenditures are reducing but are reducing relatively in a small way. It is about SR30 billion out of SR1 trillion, a small amount. The reason for that action is the result of all the efficiencies we have done over the past three years have now started yielding results." 
Al-Jadaan said he is confident the economy is picking up. "You have seen the third-quarter results. The private sector GDP grew by 4%, which is the highest in five years. Non-oil GDP is growing the highest in the last 4/5 years at 3.1% . We are confident the economy is picking up and leading indicators say private sector confidence is back. PMI indices are at the highest in the last five years."
He said an international listing of Saudi Aramco is “still on the cards” but likely won’t happen soon. 
Speaking on the world economy, he said: "Obviously the economy goes through cycles, but I do not think there is any serious risk in 2020. I think it will be stable. A little bit of growth is likely with trade tensions easing with geopolitical tensions easing. That will give the markets a good kick to continue growth through the year."  -TradeArabia News Service