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Foreign Investors Get 23% Of Saudi Aramco’s Institutional IPO

Less than a quarter, or 23 percent, of the institutional portion of Saudi Aramco’s initial public offering went to non-Saudi investors, the head of Investment Banking at National Commercial Bank, Wassim al-Khatib, told Al Arabiya news channel on Monday.  

The Saudi Public Pension Agency was allocated shares which equal 11.5 percent of the institutional tranche of the IPO, al-Khatib said.

Following the largest IPO in history, Saudi Aramco’s shares will be listed and start trading on the main market of the Saudi oil exchange on Wednesday, December 11, the Saudi Stock Exchange, Tadawul, said last Friday.  

On Thursday, Saudi Aramco announced the final offer price for the offering. Saudi Arabia’s state oil giant priced its IPO at the top end of the range—32 Saudi riyals ($8.53), which made the share listing the largest in history, surpassing the US$25-billion IPO of Alibaba on the New York Stock Exchange in 2014.

At the start of the book-building process, Aramco had set an indicative price range of 30-32 Saudi riyals, (US$8-$8.53), per share, in its long-awaited IPO. The upper end of the pricing range gives the company a total value of some US$1.7 trillion.  

Although the US$1.7 trillion valuation would make Aramco the most valuable listed company in the world, the valuation will still be US$300 billion short of the coveted US$2-trillion that Saudi Crown Prince Mohammed bin Salman has sought for years.

Saudi Arabia also has to rely on domestic interest in its oil giant, and possibly on large institutional investors from its Persian Gulf friends, as foreign fund managers have not been too keen to invest in the world’s most profitable oil company.

When its shares start trading on the Saudi stock exchange this week, Aramco will become the world’s largest listed firm by market capitalization, easily beating Apple whose market cap was some US$1.2 trillion early on Monday.  

By Tsvetana Paraskova for Oilprice.com

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