Morocco favors local institutional investors in Maroc Telecom stake sale

Maroc Telecom Chairman Abdeslam Ahizoune gestures during the company's full-year results news conference in Rabat. Maroc Telecom is Morocco's largest telecom operator. (File/Reuters)
Updated 11 June 2019

Morocco favors local institutional investors in Maroc Telecom stake sale

RABAT: The Moroccan government, which plans to sell an 8% stake in Maroc Telecom, will sell 6% of that this month as a block order to local institutional investors such as retirement funds, insurance companies and banks, the ministry of finance said on Tuesday.
The remaining 2% stake will be sold on the Casablanca stock exchange, where the company is already listed, it said.
The government owns 30% of Maroc Telecom, Morocco’s largest telecom operator, which announced on May 31 that the government would sell up to an 8% stake of the company’s capital.
The 6% stake comprises 52,745,700 shares, priced at 127 dirhams ($13.2) per share, which will be sold before the end of June, the finance ministry said in a statement.
Maroc Telecom is also listed on the Euronext exchange in Paris.
The 2% stake sale, totalling 17,581,900 shares, will take place on the Casablanca stock exchange as a public offering, the ministry said.
Besides Morocco, Maroc Telecom operates subsidiaries in Benin, Burkina Faso, Chad, Ivory Coast, Gabon, Mali, Mauritania, Niger, Togo and the Central African Republic.
The sale would pump $1 billion into the state budget as a first step in a privatization program that is designed to cut the 2019 budget deficit to 3.3% of gross domestic product, from 3.8% of GDP in 2018.
The government also plans to sell the five-star La Mamounia hotel in Marrakech and the Tahaddart power plant in the north of the country.

Investment and energy experts welcome ‘sensible’ Saudi Aramco IPO valuation

Updated 28 min 18 sec ago

Investment and energy experts welcome ‘sensible’ Saudi Aramco IPO valuation

  • Price regarded as a sensible compromise and that it will sell the IPO
  • Experts said the Aramco valuation was justified by the financial metrics

DUBAI: Investment professionals and energy experts delivered a mainly enthusiastic response to the pricing of shares in Saudi Aramco and the overall valuation of the biggest oil company in the world at between $1.6 trillion and $1.7 trillion.

Al Mal Capital, a Dubai-based investment bank, said that it was positive on the Aramco initial public offering (IPO) on that kind of valuation, which it said was justified by the financial metrics.

“We believe Aramco’s IPO is a central pillar of Saudi Arabia’s Vision 2030. In our view, the broader privatization of state assets will likely accelerate the flow of foreign capital into the Kingdom, improve liquidity and transparency as well as continue to help diversify its economy away from its dependency on oil. While many investors were skeptical about the ability of Saudi Arabia to roll out its ambitious agenda, they seem to be right on track.”

Tarek Fadhallah, chief executive officer of Nomura Asset Management in the Middle East, said via Twitter: “My first impression is that the price is a sensible compromise and that it will sell the IPO. Aramco should easily raise the $8.5bn from retail investors but the 29 global coordinators, managers and financial advisers will need to find the other $17 billion. A few billion from China would help.”

Robin Mills, chief executive of the Qamar Energy consultancy, said; “I think it’s a reasonable compromise. The price is well above most independent valuations but well below the aspirational price. It implies dividend yields a bit lower than the super-majors (the independent oil companies), but a similar price earnings ratio (the measure of the share price rated according to profits). Retail and local investors should be sufficient. We’ll have to see about the foreign investors.”

Ellen Wald, energy markets consultant and author of the book Saudi, Inc., said American investor would still be undecided on the IPO. 

“Remember, investors don’t put money in because they think the value is accurate. Smart investors put money in because they think the value will rise. It all depends on whether they see signs the price will rise during their time frame.”

American oil finance expert David Hodson, managing director of BluePearl Management, said: “This valuation seems to be more reasonable based on the fundamentals. Potential investors in Western markets will base their decision on cold hard facts like dividends and growth prospects. From what we now know, Aramco is offering them a compelling investment proposition to consider.”