Muhammad Bin Salman Strikes

On Saturday, November 5^th, King Salman issued a royal decree establishing a new anti-corruption committee. He appointed his son, Crown Prince Muhammad Bin Salman (MBS), as the committee’s leader and within a few hours sweeping arrests were made. Acting without support of the senior princes, MBS arrested and detained eleven princes, senior government officials, an undisclosed number of prominent businessmen linked to the royal family, and top military officers. Among those arrested on corruption charges, were Prince al-Waleed bin Talal, the Minister of Economy, and scores of Islamic scholars, judges, and intellectuals, whose views run the gamut from ultra-conservative to liberal. With this consolidation of power, MBS now commands all three hands of the Ministry of Defense.

This power grab foreshadows, albeit not imminent, the likely abdication of King Salman and the impending appointment of MBS as King. Beyond anti-corruption goals, MBS has a vision of Saudi Arabia as a more moderate and modern Islamic society. The regional rivalry and near-constant proxy wars fought by Saudi Arabia and Iran are motivation for many of the proposed reforms. Saudi Arabia must enter the 21st century with a global economy, not exclusively reliant on oil and gas, and seeking to encourage foreign investment and subtle gender equality. Beyond the legalization of women drivers, MBS has proposed the construction of green and smart cities in the country and has hosted investment galas soliciting support and funding for his endeavors. Many of these changes will be at odds with not only the ruling establishment that the arrests seek to marginalize, but also with the views of the average Saudi citizen. These reforms make the royal family vulnerable. Despite these risks, the reliable, albeit controversial, support of the U.S. will help sustain and accelerate modernization efforts by the Kingdom of Saudi Arabia in the region.

Important Disclosures:

Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. We have relied upon and assumed without independent verification, the accuracy and completeness of all information available from public sources.

Views and opinions expressed are for informational purposes only and do not constitute a recommendation by Academy Securities to buy, sell, or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change, they should not be construed as investment advice.

This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. This material has been prepared by Academy Securities and is not financial research nor a product of Academy Securities. It was not prepared in compliance with applicable provisions of law designed to promote the independence of financial analysis and is not subject to a prohibition on trading following the distribution of financial research. The views and opinions expressed may differ from those of Academy Securities. Investors are urged to consult with their financial advisors before buying or selling any securities. This information may not be current and Academy Securities has no obligation to provide any updates or changes.

Economic and market forecasts presented herein reflect a series of assumptions and judgments as of the date of this presentation and are subject to change without notice. These forecasts do not take into account the specific investment objectives, restrictions, tax and financial situation or other needs of any specific client. Actual data will vary and may not be reflected here. These forecasts are subject to high levels of uncertainty that may affect actual performance. Accordingly, these forecasts should be viewed as merely representative of a broad range of possible outcomes. These forecasts are estimated, based on assumptions, and are subject to significant revision and may change materially as economic and market conditions change. Academy Securities has no obligation to provide updates or changes to these forecasts. Case studies and examples are for illustrative purposes only.

Index Benchmarks

Indices are unmanaged. The figures for the index reflect the reinvestment of all income or dividends, as applicable, but do not reflect the deduction of any fees or expenses which would reduce returns. Investors cannot invest directly in indices.

The indices referenced herein have been selected because they are well known, easily recognized by investors, and reflect those indices that the Investment Manager believes, in part based on industry practice, provide a suitable benchmark against which to evaluate the investment or broader market described herein. The exclusion of “failed” or closed hedge funds may mean that each index overstates the performance of hedge funds generally.

THIS MATERIAL DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION WHERE OR TO ANY PERSON TO WHOM IT WOULD BE UNAUTHORIZED OR UNLAWFUL TO DO SO.