1 Aramco’s mother-of-all IPOs (Matein Khalid in
Khaleej Times) It will be the mother of all initial public offerings,
unquestionably the biggest financial deal in history. Saudi Aramco is a $2
trillion colossus, the largest oil and gas producer on earth, owner of one
fifth of the kingdom’s oil reserves.
Saudi Aramco financed the epic transformation of
Saudi Arabia into the powerbroker of Opec, the biggest economy in the Arab
world and the geopolitical future of the Middle East. Saudi Aramco pumps more
crude oil than Exxon Mobil, Shell, BP and Chevron combined.
The privatisation IPO of Saudi Aramco is central to
Deputy Crown Prince Mohammed bin Salman’s Vision 2030 strategy, which is
nothing less than a blueprint for the kingdom’s post Oil Age economy. Alibaba’s
IPO in New York and Shanghai raised $25 billion but the Saudi Aramco IPO will
raise at least $100 billion.
The crash in crude oil prices since 2014 and the geopolitical
crises in the Arab world since 2011 have only intensified the need for the
Saudi government to boost its economic growth rate, diversify its non-oil
consumer services and industrial base and attract foreign capital to the
kingdom.
Not since the reign of the late King Faisal bin
Abdul Aziz, which coincided with the black gold bonanza of the early 1970s just
after the Arab-Israeli war in the Sinai and the Golan Heights, has the economic
momentum of the kingdom portend change on such seismic a scale. Saudi Arabia’s
economic transformation creates once in a lifetime investment opportunities for
prescient investors.
The IPO of Saudi Aramco would be a milestone moment
in the history of postwar finance, an event as transformational as Sir Sigmund
Warburg’s eurobond new issue for Italy’s Autostrade or the evolution of the
Shariah-compliant (sukuk) debt markets in the 1990s. Ever since Chevron
geologists first struck oil in a Dammam salt dome in 1937, Saudi Aramco has
been the financial umbilical cord of the kingdom, generating for 90 per cent of
budget revenues.
2 Ford self-driving cars by 2021 (Gulf News) Ford
Motor Company has vowed to have self-driving cars on the road for ride-sharing
services by the year 2021. The US automaker said it was fuelling the effort
with ramped up investments in technology and by doubling the size of the team
at its autonomous-car campus in Silicon Valley.
“We see autonomous vehicles as having as significant
an impact on society as Ford’s moving assembly line did 100 years ago,” said Ford
chief executive Mark Fields. As part of its mission, Ford joined Chinese
internet giant Baidu to pump a combined $150 million into Velodyne, a US firm
specialising in self-driving car sensors.
California-based Velodyne said the cash infusion
will enable it to quickly expand the design and production of “LiDAR”
high-performance sensors for autonomous vehicles. Baidu, an investor in
on-demand ride service Uber, said that it was testing a fleet of self-driving
vehicles in China as part of a vision for promoting safe use of the technology
on a global scale.
Ford’s first fully autonomous vehicle will not have
a steering wheel, gas pedal or brake pedal, according to the carmaker. The
self-driving vehicle is being designed for services such as on-demand ride
services, Ford said.
3 The sad plight of Mongolian currency (Leisha Chi
on BBC) Even Genghis Khan himself might find it hard to conquer this battle. Mongolia's
currency is on its longest losing streak on record as the government grapples
to contain an economic crisis.
Back in 2011, a mining boom helped make it the
world's fastest-growing economy with growth in gross domestic product of around
17.5%. But the tugrik lost about 7.8% of its value this month, making it the
world's worst-performing currency.
The landlocked country has substantial untapped
reserves of valuable minerals like gold, copper and coal. But then commodity
prices collapsed. And so did demand from China, which buys 90% of Mongolia's
exports. The government has since admitted that the country is "in a deep
state of economic crisis".
Due to its cash shortage, Mongolia has borrowed
massively and now owes dinosaur-sized interest payments of a debt load of
nearly $23bn. This has fuelled speculation that Mongolia could face a sovereign
default or need a bailout.
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