Saudi Aramco is big, just not big enough 2 Apr 2019 The oil producer’s accounts show it is hyper-efficient. That helps its valuation, as does the rise in the price of crude since Aramco first flirted with an IPO. But while the company is a giant, it still doesn’t warrant the $2 trillion value envisaged by Saudi’s crown prince.
Norway’s mega-fund fluffs move away from crude 8 Mar 2019 Oslo’s $1 trillion wealth fund will ditch oil exploration stocks, but stay invested in groups that also do refining. As a big producer Norway needs to tread carefully. But accepting the risk of subpar returns could have been a way to show greater climate change leadership.
Norway’s giant oil fund flaunts Achilles’ heel 27 Feb 2019 The Nordic state’s $1 trillion wealth vehicle lost money in 2018. A political mandate that obliges it to hold more equities rather than diversifying its exposure explains why. Even if these shackles were removed, the fund’s size complicates efforts to rev up performance.
Saudi stock market’s “MbS discount” to get worse 22 Nov 2018 Since Jamal Khashoggi’s murder in October, foreigners have dumped Riyadh-listed assets. Donald Trump’s indifference to the crown prince’s alleged role in the killing offers some reprieve. But the kingdom’s stability and long-term economic progress have been permanently impaired.
The Exchange: 1MDB, Goldman, Jho Low and Leo 19 Nov 2018 The new book “Billion Dollar Whale” chronicles the Malaysian mega-scandal involving Goldman Sachs and Leonardo DiCaprio. Co-author Tom Wright joined Breakingviews in Hong Kong to discuss how alleged mastermind Jho Low pulled it off and what the saga’s next chapter may bring.
Qatar’s flashy London deal hints at new direction 7 Nov 2018 The Gulf state’s wealth fund is buying posh London hotel Grosvenor House. Despite its neighbours’ blockade, Qatar has surplus cash to invest in trophy assets that offer good returns. Acquiring glitzy baubles suggests Qatar’s new fund managers will prioritise the former.
Goldman gets no closure from banker’s 1MDB plea 1 Nov 2018 Former star banker Tim Leissner pleaded guilty in the Malaysian money-laundering scheme. The firm can cite his lies and deception. But fat fees from bond offerings should’ve raised red flags. U.S. authorities have punished Wall Street for past examples of poor oversight.
Saudi reforms crash into royal reputational risk 26 Oct 2018 In October 2017, Saudi Arabia’s Crown Prince Mohammed bin Salman outlined a more liberal and market-friendly vision in Riyadh. A year on, the kingdom is under fire after the death of Saudi journalist Jamal Khashoggi. Breakingviews explains what happened in between.
E-book: A year in the life of MbS 26 Oct 2018 In October 2017, Saudi Arabia’s Crown Prince Mohammed bin Salman outlined a more liberal and market-friendly vision in Riyadh. A year on, the kingdom is under fire after the death of Saudi journalist Jamal Khashoggi. Breakingviews explains what happened in between.
Riyadh is clouding Masayoshi Son’s $100 bln vision 15 Oct 2018 Fallout from the disappearance of a prominent Saudi journalist has hit SoftBank, whose mega fund is backed by the Kingdom. Shareholders are rattled: entrepreneurs will probably be wary of accepting fresh investments. Raising more money now looks far more challenging too.
Norway’s anti-plastics push has firm foundations 6 Sep 2018 Oslo’s $1 trillion wealth fund wants its investments to flag what they’re doing on ocean pollution. As a recent spat over oil and gas holdings shows, political meddling means good intentions don’t always translate into action. That should be less of a problem this time around.
Norway and Saudi face two sides of same problem 24 Aug 2018 Oslo’s $1 trillion wealth fund wants to shed its oil and gas stocks, but a cautious government may not let it. Riyadh’s $250 billion equivalent wants steady growth, but the state may push it into leveraged, risky ventures. Both need more independence, and less political meddling.
Saudi’s investment fund: the view from 2023 20 Aug 2018 The kingdom wants to expand the assets of its Public Investment Fund by 60 percent by 2020 as it diversifies away from oil. That involves it taking some big, risky bets. Breakingviews imagines the letter its chief executive will write five years hence.
Tesla is risky vehicle for Saudi reform drive 14 Aug 2018 The Gulf state wants to diversify away from oil and might help take the auto group private, reckons CEO Elon Musk. That’d be a mistake. Tesla could flop even if electric cars take off, and Musk’s buyout price is too high. There are cheaper ways to play the energy transition.
Saudi’s fund manager-in-chief veers off-piste 10 Aug 2018 Mohammed bin Salman wants to diversify the desert kingdom away from oil. Buying pricey Tesla stock while selling Canadian assets seems a strange way to do that, though. To stop further net outflows of capital, the crown prince could do with sticking more closely to his mandate.
Tesla buyout would need to go short on leverage 7 Aug 2018 Elon Musk wants to drive the unprofitable electric-car maker off the public market at a $72 bln sticker price. Banks would balk at lending much more than a third of that, so he’d need to persuade shareholders to stay and big investment funds to jump in. That’s eminently doable.
Sovereign investors sound market alarm 13 Jul 2018 Singapore's GIC has joined compatriot Temasek in striking a note of caution. It is reducing its exposure to developed markets and holding more cash: trade ructions, tighter rates and stretched valuations are giving it pause. That all points to lower returns ahead.
Viewsroom: 1MDB rears head in Malaysian election 16 May 2018 The $5 bln sovereign-wealth fund’s scandal played a role in voters replacing Prime Minister Najib Razak with nonagenarian Mahathir Mohamad. Its resurgence could mean bad news for Goldman Sachs and Najib himself. Plus: Walmart nabs Flipkart in a big bet on e-commerce in India.
China is third-best option for Saudi Aramco 16 Oct 2017 With its $2 trln public offering in the balance, the Saudi oil giant may bring in a Chinese investor. That would provide cash the state doesn’t urgently need. The other perks of an international IPO, like regional influence and financial discipline, aren’t to be found in Beijing.
Aramco exemption bends London IPO rules to limit 13 Jul 2017 The UK regulator wants to change its listing regime to lure state-controlled groups like the Saudi oil giant. The watchdog has to keep markets clean while protecting London’s competitiveness. But making policy for a single company - especially one as big as Aramco - is a mistake.