Al-Tassan to Asharq Al-Awsat: Major Int’l Companies Are Interested in Entering Tadawul

Saud Al-Tassan, CEO of EFG Hermes Saudi Arabia (Asharq Al-Awsat)
Saud Al-Tassan, CEO of EFG Hermes Saudi Arabia (Asharq Al-Awsat)
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Al-Tassan to Asharq Al-Awsat: Major Int’l Companies Are Interested in Entering Tadawul

Saud Al-Tassan, CEO of EFG Hermes Saudi Arabia (Asharq Al-Awsat)
Saud Al-Tassan, CEO of EFG Hermes Saudi Arabia (Asharq Al-Awsat)

Saud Al-Tassan, CEO of EFG Hermes Saudi Arabia, revealed that major international companies, including BlackRock and Franklin Templeton, are showing great interest in entering the Saudi financial market (Tadawul).

He stressed that the Public Investment Fund (PIF), through its acquisition of local companies, plays “a major positive role in raising the quality in all sectors, which made investors aspire to a larger stock market.”

Al-Tassan was speaking in an interview with Asharq Al-Awsat, on the sidelines of the EFG Hermes Saudi Forum, which was held on Monday and Tuesday in London, under the theme, “Looking for Sustainable Growth.”

The event was attended by 370 participants, including investors, businessmen and representatives of more than 50 Saudi joint stock companies, in addition to the Chairman of the Board of Directors of the Saudi Capital Market Authority, Mohammed bin Abdullah Al-Kuwaiz, and the Executive Director of the Saudi Tadawul, Mohammed Al-Rumaih.

Al-Tassan said that the outcome of the forum was “very positive,” pointing to the great cooperation between Tadawul and Saudi Hermes, which managed the IPOs of major companies, including Aramco, ACWA Power and Americana in the Saudi market.

Asked about the challenges facing foreign investors in the Saudi financial market, the CEO of EFG Hermes Saudi Arabia pointed to the percentage allocated to foreigners, which is approximately 15 percent, noting that in some markets in the world, foreign investors’ share exceeded 50 percent.

“The reason for this is the strong internal demand for the Saudi financial market. This is very important, but with time we hope to see an increase in the permitted percentages of foreign investments,” he told Asharq Al-Awsat.

Al-Tassan stressed that this matter would not prevent the achievement of the Saudi financial market’s ambition to become one of the five largest global markets, saying that Tadawul was now among the 10 largest markets in the world.

“[Tadawul] was very far from this rank when Vision 2030 was announced in 2016; therefore we are optimistic that it will become among the top 5 markets by 2030, and may surpass this rank,” he remarked.

Regarding the sectors that will constitute the engine of this growth, he said: “We expect all sectors to achieve growth, especially since we, in Saudi Arabia, have all the ingredients to become one of the largest competitors at the global level.”

Al-Tassan continued: “We are here [in London] not because of oil. Oil has been in Saudi Arabia for a long time. What has changed now, under the guidance of the wise leadership, is that the focus has become on non-oil sectors. Oil helped us reach this stage, but we are optimistic about other sectors that have had a significant impact on the Saudi market.”



Israel’s ‘Economic War’ Chokes Occupied West Bank

Palestinians queue to withdraw money from an ATM in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024.
Palestinians queue to withdraw money from an ATM in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024.
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Israel’s ‘Economic War’ Chokes Occupied West Bank

Palestinians queue to withdraw money from an ATM in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024.
Palestinians queue to withdraw money from an ATM in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024.

Palestinian teenagers bounced on trampolines and jumped through hoops inside a towering tent on the outskirts of Ramallah, the financial hub of the occupied West Bank.

But the circus students weren't the only ones bending over backwards in the pavilion: the school's director faced financial hurdles to buy the tent from Europe and trampolines from Asia.

"We are suffering with international payments," said Mohamad Rabah, head of the Palestinian Circus School, describing a bureaucratic process that could delay equipment delivery by up to a month.

Banking in the Palestinian territories is challenging, with the Palestinian Authority (PA) under scrutiny for potential terror financing, hindering transactions.

Israel has occupied the West Bank since 1967, with strong economic ties allowing two Israeli lenders to serve as correspondent banks in the Palestinian territory.

But this may change if Israel's far-right Finance Minister Bezalel Smotrich carries out threats to sever a vital banking route next month.

Since Hamas's October 7 attack triggered the Gaza war, Israel has imposed economic curbs on the PA, withholding tax revenues it collects on its behalf.

Smotrich said this week he had redirected $35 million in PA tax revenues to families of "terrorism" victims, a move condemned by the United States.

After three European countries recognized Palestinian statehood in May, Smotrich told Prime Minister Benjamin Netanyahu he would not extend indemnity to banks that transfer the funds from the end of June.

Israel's Bank Hapoalim and Israel Discount Bank need protection, expiring on July 1, to avoid sanctions for dealing with Palestinian lenders.

Israel's central bank and finance ministry declined to comment when contacted by AFP.

A Palestinian fruit vendor arranges his street cart in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024. (AFP)

- 'Humanitarian crisis' -

The banking channel used to pay for West Bank imports -- including essential goods like water, fuel and food -- handles $8 billion yearly.

Palestinian businesses receive nearly $1.7 billion annually for exports, according to the Palestine Monetary Authority.

"For us, because our economy is dependent on the Israeli economy, because Israel is controlling the border, the impact will be high," said PMA governor Feras Milhem.

The Palestinian economy is largely governed by the 1994 Paris Protocol, which granted sole control over the territories' borders to Israel, including the right to collect import duties and value-added tax for the PA.

Palestinian livelihoods have also been hurt by bans on laborers crossing into Israel and by a sharp downturn in tourism in the territory, including a quiet Christmas season in Bethlehem.

The United States has urged Israel to improve conditions, warning that severing the banking route would have a dire impact on the West Bank economy.

"I believe it would create a humanitarian crisis in due course if Palestinian banks are cut off from Israeli correspondence," US Treasury Secretary Janet Yellen said last month.

Western governments fear Israel's economic policies could destabilize the West Bank.

"The banking system may collapse and therefore the PA may collapse as well," a European diplomatic source in Jerusalem told AFP on condition of anonymity.

"The PA is in a financial crisis and it could collapse before August."

A Palestinian vendor unloads his stock in front of a shop in the main market in Ramallah city in the Israel-occupied West Bank on June 9, 2024. (AFP)

- Digital currency -

Palestinian businessmen say their bottom lines have been hit since October 7.

Imad Rabah, who owns a plastics company, said his net income had fallen 50 percent in one year.

Musa Shamieh, who owns a womenswear company said the Israeli policies were designed to push Palestinians to leave the West Bank.

"They want us to leave our land and they know it will be hard for us to stay if we can't do business," Shamieh said.

Israel's harsh economic policies could eventually drive Palestinian policymakers to pursue sweeping changes to the monetary system.

"We need to work on a plan B when it comes to the trade relations," said Milhem, governor of the PMA, which uses an image of the former Palestinian pound as its logo.

Yousef Daoud, professor at the West Bank's Birzeit University, said the territory could scrap the shekel as its de facto currency in favor of a digital alternative.

"We can make our e-currency, just collect all the shekels, issue an equivalent amount of Palestinian pounds, one-to-one fixed exchange rate, and have the Palestinians deal with e-currency," he said.

"Somehow, eventually, we'll get rid of the shekel."