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Carlyle Group Chairman: Saudi Arabia Will Encourage More Capital Attraction

David Rubenstein, Co-Founder and Co-CEO of the Carlyle Group, Reuters
David Rubenstein, Co-Founder and Co-CEO of the Carlyle Group, Reuters
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Carlyle Group Chairman: Saudi Arabia Will Encourage More Capital Attraction

David Rubenstein, Co-Founder and Co-CEO of the Carlyle Group, Reuters
David Rubenstein, Co-Founder and Co-CEO of the Carlyle Group, Reuters

Carlyle Group Chairman David Rubenstein said on Thursday that the kingdom of Saudi Arabia has become more attractive for foreign investment after the introduction of Vision 2030.

In a broadcast interview, the chairman of one of the world's largest investment firms said: "I have been in Saudi Arabia for more than 25 years and I am already investing in Saudi Arabia, but the atmosphere is now more encouraging and will encourage more capital attraction."

Rubenstein’s statements come as the Saudi Public Investment Fund launched its 2018-2020 program, aimed at achieving "Vision 2030."

Crown Prince Mohammed bin Salman, announced the Saudi Vision 2030 for the Kingdom in April 2016, which aims to diversify the Saudi economy and reduce dependence on oil.

The vision includes the establishment of the largest sovereign investment fund with a total value of more than $2 trillion, after the privatization of Saudi Aramco, which will also become the largest company in the world.

Economists, experts, investors and analysts are currently awaiting the listing of the Initial Public Offering for the 5% sale of the company.

Among other positive developments, Saudi Arabia also announced in May 10 programs of strategic importance to achieve Vision 2030.

The goal of Vision 2030 is to make the Kingdom's economy more prosperous and more vibrant while adhering to Islamic values and a well-established national identity.

PIF’s recently published program maps out the next three years in order to achieve four main objectives: establishing new sectors, localizing advanced technologies and information, and building strategic economic partnerships.

More so, PIF eyes strengthening its role as an effective engine to diversify the economy in Saudi Arabia, in addition to deepening the impact and role of the Kingdom across the regional and global scene.

In the next three years, PIF's program includes 30 initiatives—details were laid out in the program’s outline, which will raise the Fund's assets to 1.5 trillion riyals ($ 400 billion) by 2020 and generate some 20,000 local jobs directly - half of which would require high skills - and 256,000 construction jobs.

The PIF program emphasizes integration with the Saudi private sector through brand new local investment portfolios distributed among Saudi companies. They involve investments aimed at developing promising sectors, real estate projects and infrastructure development, and the Saudi investment margin for major projects.

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Markets Wary as Trump Returns to the White House 

US President Donald Trump reviews the troops in Emancipation Hall during inauguration ceremonies at the US Capitol in Washington, on January 20, 2025. (AFP)
US President Donald Trump reviews the troops in Emancipation Hall during inauguration ceremonies at the US Capitol in Washington, on January 20, 2025. (AFP)
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Markets Wary as Trump Returns to the White House 

US President Donald Trump reviews the troops in Emancipation Hall during inauguration ceremonies at the US Capitol in Washington, on January 20, 2025. (AFP)
US President Donald Trump reviews the troops in Emancipation Hall during inauguration ceremonies at the US Capitol in Washington, on January 20, 2025. (AFP)

Financial markets swayed and wobbled at the beginning of Donald Trump's second US presidency after he made a softer start on China than many had anticipated, but then signaled punitive tariffs on North American neighbors within hours.

A wave of relief that swept across markets - as his speech and slew of executive orders imposed no new trade levies - was stopped in its tracks when Trump told reporters in the White House's Oval Office that he was thinking about 25% tariffs on Mexico and Canada from Feb. 1.

The dollar, which had slipped, reversed course to hit five-year highs on its Canadian counterpart.

Hong Kong shares rose, battery stocks fell and the trading day was a neat reminder of both the rollercoaster that markets rode through Trump's first term and how, this time, investors feel more sanguine about the risks.

"Prepared remarks and what's off the cuff - both of them will move markets," said Tai Hui, chief market strategist in Asia at J.P. Morgan Asset Management, at a briefing in Singapore.

"Rather than basing all our investment decisions on what is announced...we just have to maybe take a step back and just absorb," he said.

"What was said on the campaign trail...and what is now being studied and researched and implemented there's still going to be a significant gap."

Trump had vowed to immediately impose steep tariffs of 10% to 20% on global imports into the US and 60% on goods from China, but a memo he issued after taking office only directed agencies to research and investigate the US trade deficits.

The dollar hit a five-year high of 1.452 Canadian dollars before steadying around C$1.44. It rose but stayed below last month's highs on the Mexican peso.

Treasuries rallied and S&P 500 futures rose 0.2%. European futures slipped 0.4%. Chinese stocks and the yuan tentatively rose.

"Tariffs are necessarily an overhang," said Vis Nayar, chief investment officer at Eastspring Investments in Singapore.

"I think we should expect volatility. But there is hope that there is some pragmatism. We have to assume that he's not going to do anything that just brings up US inflation without paying attention to that."

PRO-BUSINESS, BUT AT A COST

Trump enters office with an ambitious agenda spanning trade, immigration, tax cuts and deregulation which has the potential to boost US corporate profits but which could also reignite inflation and put upward pressure on interest rates.

In his inaugural speech, Trump pledged to bolster the US oil, gas and power industries and to crack down on immigration.

He pardoned supporters who attacked the Capitol four years ago. He also withdrew from the Paris climate pact and declared an emergency to clear the way for more oil and gas production.

Battery stocks in South Korea fell after he revoked an order that had sought to ensure half of new cars sold in the US after 2030 were electric vehicles. A US holiday on Monday means that US equities will react on Tuesday.

"Most of what he has been talking about will help spur growth and corporate profits," said Jack Ablin, chief investment officer at Cresset Capital.

"But many will come at a cost. We will need to see a lot of earnings growth to make up for even a minor increase in interest rates that could follow higher tariffs" and other proposals, he said.

Cryptocurrency markets, which have soared in the run-up to Trump taking office, came under pressure as the lack of any instant crypto-friendly announcements stirred some disappointment. Bitcoin, which came close to $110,000 on Monday was trading around the $100,000 mark and a Trump-branded memecoin that hit almost $75 on the weekend fell to $36.

During the first year of Trump's first administration, the S&P 500 rose 19.4%, following a 5% rally in his first 100 days.

For the entirety of his first term, the S&P 500 rose nearly 68%, but saw bouts of volatility, stemming in part from a trade war Trump fought with China.

"The big question on investors' minds right now is going to be 'how' -- how will he cut costs and lower inflation and lower interest rates," said Josh Strange, president of Good Life Financial Advisors of NoVA, a financial advisory firm.