Saudis keen to boost trade with UK
Saudi Arabia is making an aggressive push to increase trade with the UK, with ambitions to boost deals in the oil-rich country’s financial sector.
Ibrahim al-Assaf, the finance minister, said on Thursday that there was “enormous potential” for British businesses to invest in the kingdom, which is the UK’s largest trading partner in the Middle East.
Speaking at the Saudi Finance Forum in London, Mr al-Assaf highlighted more than $400bn of infrastructure opportunities in the kingdom and said the government would publish a list of more than 40 projects later this year.
There are already more than 200 joint ventures between British and Saudi companies worth a total $17.5bn, including HSBC’s partnership with the Saudi British Bank.
Danny Alexander, Treasury chief secretary, said it was in the interest of the UK to provide expertise to support the growth in financial services.
Saudi’s economy is expected to continue to buck the global economic downturn, with annual growth of 4-5 per cent forecast between 2011-13.
“Saudi insurance is set for explosive growth and there are UK firms which want to participate,” Mr al-Assaf told the conference.
However, he refused to be drawn on whether Saudi would consider direct equity investments in British financial institutions, following in the footsteps of some of the kingdom’s neighbours.
The Abu Dhabi Investment Authority has been hurt by such attempts in the past. In 2007, it pumped $7.5bn into Citigroup, the US bank, but ended up filing an arbitration claim against the US bank, alleging it was the victim of “fraudulent misrepresentations”. Citigroup said it had not acted improperly.
However, the Qatari investment authority made a profit of about $600m when it sold a $1.8bn investment in Barclays in June 2008.
The Saudi Finance Forum comes just weeks after trade experts from the United Arab Emirates, Saudi and Qatar visited the north-east of England to try to encourage more local companies to explore business opportunities in the Middle East.
The UK and UAE governments have committed to increasing bilateral trade to £12bn by 2015, a 60 per cent increase from current levels.
On Monday, Standard Chartered’s private equity arm paid $75m for a minority stake in Construction Products Holding, a subsidiary of Saudi Binladin Group.
In June, Kohlberg Kravis Roberts became one of the first global private equity groups to be granted a licence to carry out deals in Saudi.