While mostly taking place behind the scenes, it has been a rather calamitous month for developments in Saudi Arabia: one day before the record, inaugural $17.5 billion Saudi bond priced, news broke that for the first time, a member of the Saudi Royal Family, had been executed for murder in what until then had been an unprecedented fall from grace for a member of the chosen royal elite.
The very next day, as virtually everyone in the bond market knows, Saudi Arabia priced a massively oversubcribed – the first of its kind – international bond issue, taking advantage of rising oil prices on the back of Saudi jawboning about an OPEC production freeze deal which now appears unreachable (oil is down 4% as of this moment). The deal was seen by most as a major success for the Kingdom, one whose proceeds the local authorities had started to spend just as soon as the wire transfers were executed to get thousands of government staffers back to work.
So it is perhaps quite surprising that less than 2 weeks after this historic bond sale, moments ago we learned thatthe long-serving Saudi finance minister had been relieved of his post on Royal orders.
As Al Jazeera reports, Saudi Arabia’s King Salman Bin Abdulaziz issued a Royal decree to appoint Mohammed Al-Jadaan as the new finance minister on Monday to replace Ibrahim Abdulaziz Al-Assaf.
Saudi Arabia’s Finance Minister Ibrahim Abdulaziz Al Assaf speaks to the media
Jaddan had previously been the chairman of the Saudi Capital Market Authority. He replaces Ibrahim Alassaf, who has been appointed minister of state and a member of the council of ministers, according to the royal decree.
While details of the transition are scarce, and it is unclear how Al-Assaf displeased the Saudi King, this is further evidence that a major power struggle is taking place behind the scenes, and whereas the terminated finmin should have been commended for his bond sale, the fact that he is being punished suggests that there is significiant infighting in the royal family, which will likely result in even more financial and political fallout for Saudi Arabia in the coming year, especially if oil continues its recent decline.
via http://ift.tt/2esmVjK Tyler Durden