Saudi officials in New York for bond talks

Senior representatives of Saudi Arabia’s finance industry are due to meet investors in New York today and tomorrow to brief them about plans for Saudi Arabia to issue the Middle East’s largest sovereign bond and sell shares in Saudi Aramco in 2018 to international investors.

CEO of the Saudi Stock Exchange Khalid al-Hussan and Capital Market Authority (CMA) chairman Mohammed Al-Jadaan are also expected to explain changes to market rules aimed at attracting more foreign investment. The CMA has lowered the amount qualified foreign financial institutions must have under management to access the Saudi market and increased the stake they can own in a company.

The meetings have been organised by JP Morgan Chase & Company which is helping to arrange the bond, which is reported to be for at least $10bn. Representatives from the Ministry of Economy & Planning, the Saudi Arabian Monetary Agency (Sama) and listed Saudi companies including Saudi Telecom, Sabic and Samba Financial Group will also be at the meetings.

The Saudi government was expected to launch the bond at the end of September, but Saudi Finance Minister Ibrahim al-Assaf told Bloomberg on 28 September that the size and timing of the issue had not been fixed.

Observers say the timing of the bond issue has been affected by the decision by US congress last week to allow law suits arising from the 9/11 attacks to be filed against Saudi Arabia.

Doha Bank Chief Executive Officer Raghavan Seetharaman was quoted by Bloomberg today as saying Saudi Arabia “missed the boat” by not selling its first international bond earlier to narrow a budget deficit caused by the slump in oil prices,