23 September 2017 Volume 1, Week 36 + 37 STRATEGIC SAUDI ARABIA UPDATE • Strategic Analysis • Insight News www.verocy.com SAUDI ARABIA STRATEGIC UPDATE Volume 1, Week 36 + 37 23 September 2017 STRATEGIC ANALYSIS .............................................................................................. 3 Saudi Arabia’s future: From Kingdom of Oil to Start Up Hub and Fintech center?............ 3 Saudi Arabia enters “Fun Land” .................................................................................... 10 Middle-East Tensions Soar After Critical Phone Call .......................................................11 OPEC’s Latest Report Signals An Oil Price Rally ............................................................ 14 Why Aramco Delayed Its IPO ........................................................................................ 16 Trouble Is Brewing In Kurdistan .................................................................................... 18 STRATEGIC INSIGHT NEWS ..................................................................................... 21 Saudi Arabia's PIF, SoftBank to launch robotics initiative .............................................. 21 Saudi to revise National Transformation Program ........................................................ 21 The 'jewels in the crown' of Saudi's privatization program ............................................ 23 Saudi Arabia said to offer major incentives for Tadawul listing ...................................... 25 Saudi Arabia to launch global PR offensive to counter negative press ........................... 25 Saudi Arabia, Belarus to cooperate in biotechnologies, water purification .................... 26 Saudi govt. issues new guidelines for licensing businesses ............................................ 27 Saudi Aramco considers using Egypt as refining, storage hub ....................................... 27 Saudi consumer spending improves in July ................................................................... 27 Moody’s to open office in Saudi Arabia in 2018 ............................................................. 28 $2.6bn Saudi railway to start operations in December .................................................. 28 Exclusive: Saudi Arabia plans to launch nuclear power tender next month - sources...... 30 Ban on Internet calls to be lifted in Saudi Arabia ............................................................31 Saudi Arabia’s Economic Overhaul Claims a Victim ....................................................... 32 Saudi Arabia to nationalize 28,000 government jobs by 2020 ....................................... 34 Saudis top GCC investors in UAE real estate sector ....................................................... 34 Saudi GACA to set up four firms, mulls third license for ground ops .............................. 34 Saudi, Chinese firms bag contract for final phase of Dubai solar park ............................ 35 New JV set up to strengthen MidEast renewable energy capabilities............................. 35 SABIC ranked 4th among top 100 petrochemical firms in 2016: ICIS.............................. 35 Italy Ramps Up Weapons Supplies to Saudi Arabia in Spite of EU Calls for Embargo ..... 36 SEC registers government’s stake in PIF portfolio at Edaa ............................................. 38 Prices of Saudi food, construction materials fall in August ............................................ 38 Sadara achieves full commercial ops at its chemical complex ........................................ 39 JEC changes name to Jazan City for Basic & Manufacturing Industries .......................... 39 Saudi Arabia offers mediation for resolving Erbil-Baghdad disputes ............................. 39 About VEROCY Saudis say arrests target foreign-funded dissidents ...................................................... 40 Verocy is a boutique consultancy that provides risk integrated strategy Saudi Arabia establishes committee to enhance global judicial cooperation ................. 40 services and solutions for companies Dubai-based Duplays to kick-start network of sports centres in Saudi ........................... 41 and organizations that need to Saudi Investment Authority grants licenses for SAR 3.2 bln projects in H1; China top develop and manage the value of investor ........................................................................................................................ 41 assets and resources in the MENA- Saudi hotel construction contracts to hit $2.5bn ........................................................... 41 region. Mena 'in need of over 3,000 hospitals by 2020' .............................................................. 42 Amiantit names new deputy chairman after Prince Turki resigns .................................. 43 Saudi Arabia to Seek Bidders for 1,000-Mile Red Sea-Gulf Railway ............................... 43 Mobile phone shipments to Saudi Arabia fell 4% in Q2 ................................................. 45 Snapchat blocks Al Jazeera in Saudi Arabia ................................................................... 45 Saudi offers women opportunity to work as air traffic controllers ................................. 46 For more information, please visit: www.verocy.com. Savola completes sale of 2% stake sale in Almarai ........................................................ 46 Saudi Arabia to consider raising gasoline prices by November-end: report .................... 47 Saudi labor ministry to open 80,000 jobs to women in October ..................................... 47 VAT in UAE and Saudi Arabia: What are the differences? .............................................. 47 Saudi Arabia’s crown prince scales back his ambitions .................................................. 50 Saudi, UAE-backed fund invests in messaging service Slack ......................................... 52 Saudi Arabia's PIF launches 'future investment' initiative .............................................. 52 Saudi Shura Council considers curbing religious police powers ...................................... 53 Saudi Arabia, UK sign new military agreement ............................................................. 53 Aramco plans to trade in non-Saudi crude oil: report .................................................... 54 Tadawul could lure SAR 12 bln with FTSE upgrade, says NCB Cap ................................. 54 Joint Gulf exercises wind up with aim to strengthen security, stability .......................... 54 Saudi Arabia grants license to top global firms .............................................................. 55 Saudi shipper Bahri sees VLCC market improving by Q4 ............................................... 55 Saudi businesses can boost sales five-fold with social media ......................................... 56 Saudi banks' profit to marginally rise in Q3: Al Rajhi Cap ............................................... 57 Saudi Arabia to implement bankruptcy law in early 2018 .............................................. 58 OPEC oil output slips from 2017 high on renewed Libyan outages ................................. 58 Saudis propose own port for aid for Yemen .................................................................. 59 COME AND MEET US @ .............................................................................................. 60 ABOUT THE EDITORS .................................................................................................. 60 SUBSCRIBTION INFORMATION ................................................................................... 60 About VEROCY Verocy is a boutique consultancy that provides risk integrated strategy services and solutions for companies and organizations that need to develop and manage the value of assets and resources in the MENA- region. For more information, please visit: www.verocy.com. 2 COMMENTARY 23 September 2017 SAUDI ARABIA’S FUTURE: FROM KINGDOM OF OIL TO START UP HUB AND FINTECH CENTER? International investments in high-tech and fintech and institutional investors, it now is trying to carve STRATEGIC startups worldwide are booming. Main focus of out its own leading position in the high- ANALYSIS investors (PE or institutional) is however still largely tech/fintech league of nations. No interest at all is centered on the historical boomtowns in the US, still given to the ongoing dramatic, and very Europe and Asia. India, Israel and Russia are a very promising, societal, economic and financial good second league. The world however seems to changes in Saudi Arabia. The existing views of an be changing. The amount of startups in the MENA overwhelming majority of investors, operators and region (including Israel) is growing at an financial institutions on the Kingdom are still exponential rate, but still dwarfed by US and based on the historical fact that Saudi’s position in European figures. Still, after a start-up goldrush in the world is based on its enormous oil wealth and Israel, followed by the usual Arab suspects, such as reserves. Until 2015 this picture was without any Dubai, Cairo and Tunis, others are getting up to doubt the right one to put in your mind, if not challenge these leads. interested in oil and gas, forget Saudi Arabia. Non- oil related economic sectors were struggling to get Bahrain, a very underestimated and undervalued from infancy to puberty, while the parents high-tech/fintech base, is crawling back to where (government) and its family (Saudi