1 China PM sees global upheaval ahead (Tom Phillips
in The Guardian) China’s prime minister has warned the world is entering a
period of profound political and economic upheaval as the spectre of Donald
Trump hung over the opening day of the country’s annual national people’s
congress.
Li Keqiang urged China to brace itself for “more
complicated and graver situations” ahead, as a result of developments’
“interwoven risks and dangers both at home and aboard”. Addressing about 3,000
delegates in the Tiananmen Square auditorium, Li sought to contrast China with
Trump’s increasingly inward-looking America.
“We will ... oppose protectionism in its different
forms [and] become more involved in global governance,” Li aid. Kerry Brown, a
professor of Chinese politics at King’s College London, said Trump’s election
meant the world was looking to Beijing for leadership like never before.
“Now China is a stabiliser rather than a
destabiliser. Suddenly these congresses are not just about domestic issues –
they are actually a global power doing global things because of the space that
America, Brexit and others have opened up around it. So they have a much bigger
potential impact.”
2 How Aramco IPO will redefine Saudi Arabia (Matein
Khalid in Khaleej Times) The $100 billion Saudi Aramco IPO, four-time bigger
than the Alibaba offer, is a historic event in world finance and politics. The choice of its investment banking advisors,
underwriters and listing exchange reflects the House of Saud's historic
political and economies relationships with American oil supermajors and money
centre banks.
The House of Morgan was to international banking
what the House of Saud is to global oil. So it is natural that JPMorgan is the
lead underwriter of the Saudi Aramco IPO. The choice of Morgan Stanley is
governed by its historic role in the Eurobond market and its armies of private
client wealth management advisors, inherited from Jamie Gorman's Smith Barney
deal.
HSBC also makes strategic sense since it was the
joint venture partner of the Saudi British Bank and has built a dominant
franchise in trading GCC securities via its own subsidiaries and HSBC Amanah.
Though I heard Saudi officials visited London,
Tokyo, Singapore and Hong Kong to discuss listing options, only the New York
Stock Exchange (NYSE) can provide the planet's deepest pool of investor
liquidity for the world's largest oil and gas IPO. The Saudi Aramco IPO will be
a complex
international deal, given the colossal size of the kingdom's
reserves, output and downstream empires.
The Saudi Aramco IPO is designed to lessen the
kingdom's dependence on black gold and kick-start the Saudi capital markets.
Saudi Arabia has realised that reliance on bank financing alone is a systemic
threat to its economic future since it amplifies local credit boom-bust cycles.
The kingdom, like every other GCC state, needs to
shift to an "asset securitisation" model to finance its corporate
sector. The Saudi Aramco IPO is thus a bellwether for the kingdom's new
financial renaissance.
Prince Mohammed bin Salman, the kingdom's deputy
crown prince, estimates Saudi Aramco is worth between $2 trillion and $3
trillion. This makes Saudi Aramco the most valuable company in the history of
the world, let alone the Middle East.
3 China growth target cut to 6.5% (BBC) The Chinese
growth target for this year has been cut to around 6.5%, down from 6.5 to 7%
last year, Premier Li Keqiang has announced. He was addressing the country's
rubber-stamp parliament, the National People's Congress which has gathered in
Beijing for its annual session.
The Chinese economy expanded at its slowest pace in
26 years in 2016. Mr Li said he would tackle state "zombie enterprises"
producing more coal and steel than the market needed. Similar pledges in the
past have proved hard to fulfil.
NPC leaders are tolerating slightly slower economic
growth this year to give them more room to push through some painful reforms to
deal with a rapid build-up in debt, Reuters news agency reports.
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