CMA: No major rules changes needed for Aramco IPO

Saudi Aramco is targeting 2018 for what is expected to be the world’s biggest initial public offering.
Updated 07 December 2016
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CMA: No major rules changes needed for Aramco IPO

RIYADH: Saudi Aramco’s planned flotation is unlikely to require any major changes to Saudi Arabia’s securities rules, said Abdullah Elkuwaiz, vice chairman of the Capital Market Authority.
Saudi Aramco is targeting 2018 for what is expected to be the world’s biggest initial public offering, with a listing at home and overseas among the options.
Saudi Arabia’s ambitious Vision 2030 plan to diversify away from oil includes greater private sector involvement and improving the efficiency of state-owned companies.
Should a dual listing happen, some work might be needed involving the management of shares between two markets, such as the mechanics on the sharing of information on trades, the vice chairman told reporters on the sidelines of a conference on Tuesday.
Saudi Arabia has never before had a dual listing involving a company listed on its bourse, which is known as the Tadawul.
“If there is a decision to list in another exchange, whether it is Aramco or any other company, there would be something that will need to be done, but most of this is more on the operations side not the regulatory side,” he said.
Ultimately it will depend on the structure which Aramco decides to employ on its listing, but from what the CMA is anticipating there would be no need for additional rule changes, Elkuwaiz added.
The CMA has made changes to existing regulations in recent months and introduced new initiatives aimed at developing the market and securing inclusion in global indices such as MSCI which are shadowed by international investors.
Among these are the gradual opening up to foreign capital — the latest incarnation coming into force at the beginning of September — and a switch to settlement of trades within two working days, which is on track for the first half of 2017, Elkuwaiz said.
A market for small and medium-sized businesses, announced in April and expected to go live in early 2017, had received close to 10 applications even though the draft rules had not been approved yet, he added.
Elkuwaiz, who is heading the regulator after Mohammed Al-Jadaan was named finance minister on Oct. 31, said it was unclear when a new CMA chairman will be appointed.
An unintended consequence of the settlements change and the SME market launch would be that plans for a prime section of the Tadawul — a new index which would contain top blue-chip stocks — would likely be delayed, Elkuwaiz said.
A new corporate governance law containing additional measures to protect shareholders was also close to being announced and may be used to judge which companies qualify for the prime index, he added.


US-Saudi business council reports $13bn in contracts

Updated 24 May 2019
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US-Saudi business council reports $13bn in contracts

  • Improved oil prices, combined with a government focus on spending, contributed to the rise, the council said

LONDON: The value of joint Saudi-US contracts rose to $13 billion in the first quarter of 2019, according to a business council report.

That marked the highest value of awarded contracts since the first quarter of 2015, the US-Saudi Arabian Business Council said.

The value of contracts awarded during the first quarter amounted to about half of the total value in all of last year, it added.

The contracts “included many vital projects, notably in the oil, gas, water and transport sectors,” Abdallah Jum’ah, the co-chair of the council, was reported as saying by Asharq Al-Awsat.

Energy was the top sector, with $3.1 billion of the value of contracts awarded, with many struck by Saudi Aramco. 

Improved oil prices, combined with a government focus on spending, contributed to the rise, the council said.

The construction sector also looks set for a recovery after many projects were put on hold due to the oil-price crash.

“If the pace of awarding construction contracts witnessed during the first quarter of 2019 continues for the rest of the year, the index of awarding construction contracts may return to the range we witnessed before the canceling and postponing of mega projects due to lower oil revenue,” the council said.