ABU DHABI (Reuters Breakingviews) - Epic natural-resource wealth, a ruling family becoming more progressive, and a pot of cash to invest in diversifying the economy. Until recently, asset managers looking for all that, plus Gulf exposure, would think first of Saudi Arabia. Ditto start-ups and governments attracted by the $45 billion pumped into SoftBank’s Vision Fund or $20 billion destined for a Blackstone infrastructure fund from the kingdom. With Riyadh’s reputation now crushed following the murder of journalist Jamal Khashoggi, Qatar may be their best alternative.
DUBAI (Reuters Breakingviews) - If Saudi Arabia was a corporation, its executive chairman would now consider replacing its chief executive, whose underlings have officially been accused of murdering an unarmed civilian in an overseas branch – the consulate in Istanbul. Saudi is not a company. It is an absolute monarchy, with a king and a crown prince rather than a chairman and CEO.
LONDON (Reuters Breakingviews) - The Wall Street tail is wagging the Washington dog. In the past, Saudi Arabia’s alleged involvement in the disappearance of journalist Jamal Khashoggi would have met with robust condemnation from the United States government. American banks and companies would then reluctantly pass up the chance to compete for lucrative business. But in the last few days a stream of luminaries headed by JPMorgan CEO Jamie Dimon have turned that dynamic on its head.
LONDON (Reuters Breakingviews) - Britain has taken the plunge. UK energy regulator Ofgem on Thursday outlined how it intends to cap energy consumers’ bills, after both main political parties advocated upper limits on what households pay. The whiff of interventionism warrants nervousness in domestic banks’ boardrooms.
LONDON (Reuters Breakingviews) - Britain is trying on its Brexit crash helmet. The UK government will on Aug. 23 reveal the first batch of contingency plans covering what happens if the country exits the European Union next March without a deal. The papers are unlikely to assuage many people’s concerns. What the government won’t say, however, is that it has a trump card.
LONDON (Reuters Breakingviews) - Investors in oil majors have a problem. The need to curb carbon emissions means that sometime in the next few decades demand for fossil fuels could peak, raising the risk that prices collapse and reserves lose their value. Shareholders need to decide whether to ask tougher questions, or carry on as normal.
LONDON (Reuters Breakingviews) - As poisoned chalices go, being president of Zimbabwe takes some beating. ZANU-PF leader Emmerson Mnangagwa was declared the winner of the first presidential elections to be held since Robert Mugabe’s removal in a coup. He will find it harder to prevail over the country’s litany of economic problems.
LONDON (Reuters Breakingviews) - Mohammed bin Salman’s financial engineers are earning their fees. Plans for the Saudi crown prince to spearhead a triumphant listing of domestic oil titan Aramco are on ice, but his advisers have a workaround - Aramco may now create the cash itself by borrowing money and buying a stake in chemicals group SABIC. It’s a clever idea, but no substitute for plan A.
LONDON (Reuters Breakingviews) - BP is bucking the trend. Oil investors nowadays are sceptical of pricey deals that double down on hydrocarbons. The UK oil major’s $10.5 billion acquisition of BHP’s U.S. shale assets, announced on Friday, superficially ticks those problematic boxes, but is still worthwhile.
LONDON (Reuters Breakingviews) - Britain has joined the security party. The UK government on Tuesday outlined how it proposes to screen foreign investment in domestic companies to better fend off security threats. While most of the proposed changes seem reasonable, they increase scope for political meddling.