Market rules ready for Aramco listing ‘by end of June’

Saudi Aramco’s Khurais oil processing facility, 160 km east of the capital Riyadh. The Kingdom has been overhauling its stock market rules to prepare for the local listing of state-owned Aramco. (AFP)
Updated 30 March 2018

Market rules ready for Aramco listing ‘by end of June’

NEW YORK: Saudi Arabia expects to unveil by the end of June rules to prevent large share price drops in newly-listed companies, the final regulatory step for the listing of oil giant Saudi Aramco, the head of the kingdom’s stock market regulator said.

The mechanism, known as price stabilization, is common on developed markets and allows underwriters of an initial public offering (IPO) to use some of the company’s stock to bolster its price, should it fall in the days after it starts trading, or the volume of shares changing hands is weak.

The Kingdom has been overhauling its stock market rules to prepare for the local listing of state-owned Aramco, which is hoping to raise $100 billion or more through a 5 percent stake sale later this year.

Saudi authorities have also said they want Aramco, whose IPO is billed as the world’s largest, to have an international listing, although no decision has been made on the location. This listing could be delayed until Aramco starts trading on the Tadawul, as the Saudi stock exchange is known.

The Capital Market Authority (CMA) issued updated rules in the last couple of months covering how securities are sold in the kingdom and how the offer price of an IPO is calculated using the bookbuild method, Mohammed El Kuwaiz, chairman of the market regulator, told a media event in New York late Wednesday.

“Once (the price stabilization guideline) is issued, we can then say that the Saudi market will be fully amenable to accommodate an offering of the size of Saudi Aramco, or indeed of any size,” he said.

Speaking to Reuters on the sidelines of the event, El Kuwaiz said drafting of the regulation was at “an advanced stage,” and it will be issued before the end of the first half of the year.

The CMA was also expecting to start work by the end of the year on rules governing dual-listings on the Saudi stock market that would be sent out for market feedback early in 2019, El Kuwaiz said.

The timetable could be brought forward if a company approached it wanting to list on another market, he added.


India to invest $1.46 trillion to lift virus-hit economy

Updated 15 August 2020

India to invest $1.46 trillion to lift virus-hit economy

  • Modi announced a national digital heath plan under which every Indian will get an identity card containing all health-related information
  • Modi said the government has identified 7,000 infrastructure projects to offset the economic impact of the pandemic
NEW DELHI: India’s prime minister said Saturday his country has done well in containing the coronavirus pandemic and announced $1.46 trillion infrastructure projects to boost the sagging economy.
The key lesson India learnt from the pandemic is to become self-reliant in manufacturing and developing itself as a key supply chain destination for international companies, Prime Minister Narendra Modi said.
“The coronavirus epidemic is a big crisis, but it can’t stall India’s economic progress,’’ Modi said in a speech from New Delhi’s 17th century Mughal-era Red Fort to mark 74 years of the country’s independence from British rule. He wore an orange and white turban with a long scarf around his neck.
He also said that three vaccines are in different phases of testing in India and it will start mass production as soon as it got a green light from scientists. “Detailed plans are in place for large-scale production of corona vaccine and making it available to every Indian,” he said.
India’s coronavirus death toll overtook Britain’s this week to become the fourth-highest in the world as the country reported over 2.5 million confirmed cases, just behind the US and Brazil.
Modi also announced a national digital heath plan under which every Indian will get an identity card containing all health-related information.
The celebrations were curtailed on Saturday because of the pandemic, with invitations going only to 4,000 guests instead of normal 20,000, media reports said.
The International Monetary Fund projected a contraction of 4.5 percent for the Indian economy in 2020, a “historic low,” but said the country is expected to bounce back in 2021.
Modi said the government has identified 7,000 infrastructure projects to offset the economic impact of the pandemic.
“Infrastructure will not be created in silos anymore. All infrastructure has to be comprehensive, integrated and linked to each other. Multi-modal connectivity infrastructure is the way forward,” he said.
He said that India saw a record 18 percent jump in foreign direct investment in the past year, a signal that the international companies are looking at the country.
Modi didn’t refer to China directly, but India is trying to capitalize on its rival’s rising production costs and deteriorating ties with the United States and European nations to become a replacement home for large multinationals.
Referring to border tensions with China in the Ladakh area, he said Indian forces had given a befitting response in the mountainous region where thousands of soldiers from the two countries remain in a tense standoff since May. India said 20 of its troops died in hand combat with Chinese troops on June 15.
“Whether it’s terrorism or expansionism, India is fighting the challenges bravely,” Modi said in apparent references to threats from neighboring Pakistan and China.