GLOBAL: Moody's Investors Service expects the corporate sector to contribute to a significant portion of its business in Saudi Arabia as the country takes concrete steps toward realizing its national agenda.
"The government has a plan to privatize a number of state-owned companies and we think those privatized state-owned companies will turn to the debt capital market for funding," Mahmoud Totonji, the general manager and head of relationship management of Moody's new Saudi operations, told IFN. "A number of these companies will be a part of the petrochemical industry; however, there are many opportunities for Moody's arising from sectors arising from Vision 2030."
Among these sectors include manufacturing and construction.
Like Mahmoud, Rob Fauber, the president of Moody's, is optimistic that the Saudi Kingdom's Vision 2030 would be a catalyst of growth for the nation's financial market.
"It is very clear that diversifying away from oil and gas is going to require significant levels of investment across multiple sectors, and international investors, particularly in the debt capital market, will play a huge role in that," shared Fauber who added that: "The opening of our Saudi office will help us to service both issuers and investors."
The prospects may be bright, but are the current market conditions and reality moving in tandem with the hopeful promise of the future?
"Overall, we have a stabilizing commodity price environment, recovery in the consumer department and generally, better access to finance. Earnings are rising and companies are feeling more optimistic when thinking about long-term investments. This is all good from a credit perspective," explained David Stables, the managing director and head of emerging EMEA corporate finance of Moody's.
This is an excerpt of a podcast with senior officials at Moody's Investors Service exploring the rating agency's decision to establish an office in Saudi Arabia following the Kingdom's decision to grant international rating agencies licenses. For the full podcast, log on to IFN Podcasts. |
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