Al-Falih: IPO of Saudi Aramco depends on oil, stock market

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Khalid Al-Falih
Updated 12 July 2016
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Al-Falih: IPO of Saudi Aramco depends on oil, stock market

ALKHOBAR: Energy, Industry and Mineral Resources Minister Khalid Al-Falih announced that initial public offering (IPO) of Saudi Aramco depends on oil and stock market conditions.

That will have a role to play in mapping out the planned IPO of Saudi Aramco and preparations will take some time, he told German newspaper “Handelsblatt”.
“The size and complexity of an initial public offering of Saudi Aramco will require a great deal of internal preparation,” he added in a report published in Asharq Al-Awsat.
Al-Falih said: “The actual IPO timeframe will also be subject to a number of external factors including equity market conditions, oil price outlook, and domestic capital market readiness.”
Handelsblatt reported that Al-Falih was cagey about the IPO.
During the interview, Al-Falih also discussed Saudi Vision 2030 and how important it is that German companies take part in it.
It is expected for the IPO of Aramco to become the world’s largest-ever public offering given that the government plans to sell about 5 percent of the shares before the end of 2018. Deputy Crown Prince Mohammed bin Salman estimated it to be between $2 trillion and $3 trillion.
The interview came as Siemens won a contract to develop gas turbines in Saudi Arabia of an estimate of $500 million.
This is the first time that Al-Falih speaks out about IPO of Aramco since his press conference in Vienna in June during The Organization of the Petroleum Exporting Countries (OPEC) meeting.
Al-Falih told the reporters back then that they will convince investors to maintain an oil surplus for its long-run benefits. He commented that investors “should accept this policy.”
During his visit to the US in Ramadan month, Al-Falih spoke with “Houston Chronicles” newspaper, yet little was mentioned about the IPO.
International banks’ main concern regarding IPO of Aramco is the company’s policy of maintaining an oil surplus to be used in crisis times. Banks believe this is not feasible given that these are non-used assets and no other international oil company does that.
Aramco is studying options to launch less than 5 percent of the company shares including local stock market or double launch that includes the international market.
Al-Falih said that the time frame set to list Aramco by 2018 is “reasonable”.
He concluded that the main concentration now is the IPO of Aramco as parent company and not subsidiaries.


US intelligence says Huawei funded by Chinese state security: report

Updated 57 min 31 sec ago
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US intelligence says Huawei funded by Chinese state security: report

  • The accusation comes at a time of trade tensions between Washington and Beijing
  • Huawei dismissed the allegations

US intelligence has accused Huawei Technologies of being funded by Chinese state security, The Times said on Saturday, adding to the list of allegations faced by the Chinese technology company in the West.
The CIA accused Huawei of receiving funding from China’s National Security Commission, the People’s Liberation Army and a third branch of the Chinese state intelligence network, the British newspaper reported, citing a source.
Earlier this year, US intelligence shared its claims with other members of the Five Eyes intelligence-sharing group, which includes Britain, Australia, Canada and New Zealand, according to the report.
Huawei dismissed the allegations in a statement cited by the newspaper.
“Huawei does not comment on unsubstantiated allegations backed up by zero evidence from anonymous sources,” a Huawei representative told The Times.
The company, the CIA and Chinese state security agencies did not respond immediately to requests for comment.
The accusation comes at a time of trade tensions between Washington and Beijing and amid concerns in the United States that Huawei’s equipment could be used for espionage. The company has said the concerns are unfounded.
Authorities in the United States are probing Huawei for alleged sanctions violations.
Meng Wanzhou, Huawei’s chief financial officer and daughter of its founder, Ren Zhengfei, was arrested in Canada in December at the request of the United States on charges of bank and wire fraud in violation of US sanctions against Iran.
She denies wrongdoing and her father has previously said the arrest was “politically motivated.”
Amid such charges, top educational institutions in the West have recently severed ties with Huawei to avoid losing federal funding.
Another Chinese technology company, ZTE Corp. , has also been at the center of similar controversies in the United States.
US sanctions forced ZTE to stop most business between April and July last year after Commerce Department officials said it broke a pact and was caught illegally shipping US-origin goods to Iran and North Korea. The sanctions were lifted after ZTE paid $1.4 billion in penalties.
Reuters reported earlier this week that the United States will push its allies at a meeting in Prague next month to adopt shared security and policy measures that will make it more difficult for Huawei to dominate 5G telecommunications networks.