Saudi Arabia Hones In On Increasing Investments
It’s been a busy month for Saudi Arabia, which has been focusing heavily on investment. In mid-June, the Kingdom opened up its massive stock market for foreign investors, making it the last of the G-20 countries to do so. That said, foreign companies probably will not be flocking towards the Kingdom just yet, given the many restrictions and conditions the country has in place for their operations. For example, the only institutions that are given a thumbs-up must sort out at least US$5 billion in assets with a five-year investment record. in addition to that, individual investors can only own up to 5% of a company, and total foreign ownership can’t exceed 49%. But given that Saudi Arabia is such an attractive market, it wouldn’t be surprising to see investors knock on the country’s doors in the not too distant future.
Saudi Arabia has also continued to invest heavily in its holy cities of Mecca and Medinah. What’s been making headlines around the world is the Abraj Kudai hotel in Mecca, scheduled for opening in 2017. The hotel will consist of 12 towers, and also includes a bus station, four helipads, and a mall. Five of the 45 floors will be reserved exclusively for the Saudi royal family. with the Abraj Kudai Hotel expected to have 10,000 rooms, it is also set to become the world’s largest hotel by room count. (To put this into perspective, the current hotel with the largest room count is the MGM Grand Hotel in Las Vegas, which boasts of 6,198 rooms.) However, there have been a few reservations with all the development going on in Mecca and Medina- for instance, Irfan Al-Alwai, the Director of the U.K.’s Islamic Heritage Research Foundation, is concerned about the few remaining heritage sites in the cities, as well as the cities’ accessibility for pilgrims who cannot afford the luxury properties.
Outside of Saudi Arabia’s borders, top Saudi officials visited Russia to seal a memorandum of understanding between the two countries. Saudi Arabia’s Public Investment Fund (PIF) and the Russia Direct Investment Fund (RDIF) have agreed to jointly invest up to $10 billion together. At this point, there is no information on where the joint investments will take place, but the Deputy Governor of the PIF, HRH Prince Saud bin Khalid al Saud, has stated that they are looking for more than monetary gain, explaining that the PIF’s primary investment goal is to obtain technology to benefit the Kingdom’s economy.