X

Sign Up To Our Free Newsletter

Join Now

Thanks for subscribing to our free newsletter!

ERROR

  • 4 minutes IMPORTANT ARTICLE BY OILPRICE.COM EDITOR - "Naked Short Selling: The Truth Is Much Worse Than You Have Been Told"
  • 5 minutes “Cushing Oil Inventories Are Soaring Again” By Tsvetana Paraskova
  • 7 minutes United States LNG Exports Reach Third Place
  • 5 mins Texas forced to have rolling black outs. Not from downed power line , but because the wind energy turbines are frozen.
  • 11 hours Wednesday Nikki Haley reached out to Trump for meeting at Mar-a-lago. Trump said No ! You blew it Nikki . . .
  • 17 hours NYT:  The Supreme Court’s order (Re:  Trump’s tax returns) set in motion a series of events that could lead to the startling possibility of a criminal trial of a former U.S. president
  • 1 hour The World Economic Forum & Davos - Setting the agenda on fossil fuels, global regulations, etc.
  • 3 hours Retired RAF pilot wins legal challenge over a wind farm
  • 19 hours Disaster looming in UK offshore wind power
  • 20 hours The latest GOP nonsense on Texas shows us the future Republicans want
  • 2 hours Minerals, Mining and Industrial Ecology
  • 1 day The Cyberpandemic has Begun: SolarWinds + FireEye – Gmail & Google services down
  • 22 hours U.S. Presidential Elections Status - Electoral Votes

Saudi Aramco Clears Another IPO Hurdle

Saudi Arabia has cleared another hurdle on its way to successfully launching Aramco’s initial public offering after MSCI granted it emerging market status in its latest review, Morningstar reports. MSCI’s managing director Sebastien Lieblich was quoted as saying "International investors were impressed by the speed of change in the accessibility of the Saudi Arabian equity market and the level of commitment that the Capital Market Authority and the Saudi Stock Exchange have demonstrated".

Lieblich went on to say that investors will now watch whether the current privatization drive in the Kingdom continues to offer lucrative investment opportunities.

Undoubtedly, the cherry on the Saudi privatization pie will be the successful IPO of Aramco, the world’s largest oil company by reserves. Initially scheduled for the second half of 2018, the flotation, which many have called the biggest IPO in history, has been delayed until early 2019.

There has been concern about whether the Saudi exchange Tadawul will be able to handle the addition of Aramco: petrochemical stocks already represent a quarter of Tadawul’s equity index and with Aramco’s shares added, the share of the oil and petrochemicals industry would become disproportionately large on the exchange, dampening investor appetite.

One of the suggested solutions to this problem could create yet more difficulties though: if Aramco’s natural dominance on the Tadawul index is artificially limited in order to curb the presence of industry stocks to a more palatable level, some investors interested in buying Tadawul index options because of Aramco’s presence on it might think twice before doing it.

There are also uncertainties around the international listing of Aramco. London, New York, and Hong Kong are on the short list of Riyadh, but the latest update in this respect has been discouraging. The international listing of the oil giant has been shelved for the time being. That’s bad news for Aramco, since a dual listing would have distributed the burden of having such a huge company on your index between two exchanges.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment
  • Mamdouh G Salameh on June 21 2018 said:
    Since the beginning of this year I have been saying that the Saudi government will quietly withdraw the IPO of Saudi Aramco altogether as it no longer needs the money from the sale.

    Saudi Arabia withdrew the IPO from international listing because of problems with valuations and American litigation and it will soon withdraw it from listing on the Saudi exchange, Tadawul, because it could overwhelm it and also create liquidity problems.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News