Saudi stock exchange wants ‘exclusive’ Aramco listing

Updated 26 October 2017
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Saudi stock exchange wants ‘exclusive’ Aramco listing

RIYADH: Tadawul, the Riyadh stock exchange, would like to stage an initial public offering (IPO) of Saudi Aramco on its own, rather than be part of a global offering with other markets, its chief executive said this week at the Future Investment Initiative (FII) in Riyadh.
Khalid Al-Hussan told the Financial Times on the sidelines of the conference that he wanted the exchange to be the “exclusive” listing venue for an Aramco IPO. “Our aspiration for Tadawul, as the main exchange in the region, is to be the exclusive venue for Aramco. We are doing what it takes to make sure Aramco is listed here (in Saudi Arabia) only. We aim and work hard to be the exclusive listing venue,” he said.
An adviser close to the Tadawul confirmed to Arab News the accuracy of the report, but declined to comment further. More details are expected to emerge at the FII gathering on Thursday, the source added.
“This will change the position of the Saudi stock exchange and the Saudi capital market on the exchange global map,” Al-Hussan said.
If Aramco were to decide on a Tadawul listing only, it would be a challenge for an IPO slated as the biggest in history. The flotation of 5 percent of the company at its official valuation of $2 trillion would be worth $100 billion and would be by far the biggest stock on the Saudi market, which is capitalized at a total of $440 billion.
It would also be a blow to the ambitions of New York, London and Hong Kong to host the record-breaking IPO. Armies of investment bankers, lawyers and consultants had been looking at hundreds of millions of dollars in fees from the IPO.
The suggestion that the IPO might be kept in the Kingdom is a further complication after a spate of reports that Aramco was considering a trade sale to Asian investors as preparation for a global IPO later down the line as one of a range of options for privatizing part of Aramco.
The IPO is regarded as the cornerstone of the Vision 2030 strategy to reduce the Kingdom’s economic dependence on oil. A spokesman for Aramco declined to comment on Hussan’s statements.
Amin Nasser, Aramco chief executive officer, said on Tuesday that the company was on track for an IPO in 2018.
He added that domestic and international exchanges were being considered for the transaction, but that a final decision was the responsibility of the Saudi government.
“All detailed information is currently being reviewed by our shareholder and in due course a decision will be made about the lasting venue,” he said.
One bank adviser to the Saudi government, requesting anonymity, said: “$100 billion would be too much for the Tadawul to take in one go, but they (the government) retain the option to offer a smaller portion and sell some of the rest later, either on a global market or to a trade partner. The options are not limited to a one-off IPO.”


Egypt stock market plunges as retail investors take flight

Updated 19 September 2018
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Egypt stock market plunges as retail investors take flight

  • Biggest index drop in Egypt since mid-2016
  • Saudi Arabia outperforms in Gulf

LONDON: Egyptian stocks tumbled to their lowest level this year on Wednesday as retail investors took flight.
A sharp rise in Suez Canal revenues, a major foreign exchange earner for the country, was not enough to quell investors concerns about the strength of the currency.
The main Egyptian stock index lost 3.8 percent which some fund managers blamed on generally negative sentiment toward emerging markets worldwide as well as more local speculation about possible currency devaluation.
“Our channel checks suggest the sell-off in the Egyptian market is local retail and institutions driven, on currency fears and speculation over a further round of devaluation,” said Vrajesh Bhandari, portfolio manager at Al Mal in Dubai, Reuters reported.
“Selling is further intensified as margin calls are triggered and technical support levels break down. The country canceled three consecutive Treasury auctions, citing investors’ unrealistic yield demands.”
Egypt’s Suez Canal revenues rose to $502.2 million in August up 6.7 percent from a year earlier according to official data released on Wednesday.
Elsewhere regional stock markets closed mostly lower with the exceptions of Abu Dhabi which edged 0.2 percent higher and Saudi Arabia, the best regional performer, which rose by 1.1 percent.
Saudi stocks are benefiting from the strong oil price which eased slightly yesterday but still hovered just under $79.
OPEC and some other oil producers including Russia will meet in Algeria on Sept. 23 to discuss how to allocate supply increases within their quota framework to offset the loss of oil exports from Iran following the introduction of sanctions by the US.
Those measures will come into force on Nov. 4 and data suggests that buyers are already retreating from Iranian crude purchases.
A key question for the oil price as well as regional stock markets in the weeks ahead will be the extent to which other Gulf oil exporters can compenaste for the loss of Iranian supplies by pumping more.