First shares in Aramco will be sold on Saudi stock exchange

Saudi state oil company Aramco's CEO Amin Nasser attends the 24th World Energy Congress (WEC) in the UAE capital Abu Dhabi on Sept. 10, 2019. (Karim Sahib/AFP)
Updated 10 September 2019

First shares in Aramco will be sold on Saudi stock exchange

  • State oil company’s IPO coming ‘very soon,’ chief executive says at energy congress
  • The planned IPO forms the cornerstone of a reform program Vision 2030

ABU DHABI: Saudi Aramco’s long awaited initial public offering (IPO) will take place “very soon” on the Tadawul, the Kingdom’s stock market, the state oil company’s chief executive Amin Nasser said on Tuesday.

There was also likely to be a later listing on a foreign market, Nasser said, but he declined to say where.

“The primary listing is to list locally but we are also ready for listing outside in other districts,” Nasser said at the World Energy Congress in Abu Dhabi. “We are ready to list wherever shareholders decide.”

Nasser echoed remarks by Prince Abdul Aziz bin Salman, the Kingdom’s new energy minister, on the first day of the congress. “As you heard from Prince Abdul Aziz yesterday, it is going to be very soon. So, we are ready — that is the bottom line,” Nasser said.

His comments were the first confirmation by an Aramco official of a two-stage IPO, with the first tranche of shares — perhaps about 1 per cent of the company —offered to investors on the Tadawul.

New York, London and Hong Kong have all said they would like to stage the foreign tranche of the IPO, but Tokyo has also emerged as a strong candidate. There has been speculation the IPO would be announced at the Future Investment Initiative summit in Riyadh next month, but some bankers believe it could be unveiled even sooner.

“Listing even a small number of shares of Aramco on Tadawul will provide Saudi citizens with an opportunity to invest in the Kingdom’s crown jewel,” Ellen Wald, energy consultant and author of the book Saudi Inc, told Arab News. “However, there are risks associated with this, as Tadawul is a relatively small exchange and Aramco is a large company.”

The Aramco IPO is expected to be among the largest in corporate history, and a raft of global banks last week paraded their credentials to be chosen for the prestigious and lucrative jobs advising the company and the Saudi government on the share sale. Once the winners are named, there is little to stop the IPO process from beginning immediately.

Addressing the congress on Tuesday, Nasser also said there was no limit to the oil industry’s potential if it could meet society’s demand for “ultra clean” energy. “The world faces an incredible climate challenge and we need a bold response to match,” he said.


Oil surges, stock futures slip after attack on Saudi facility

Updated 12 min 20 sec ago

Oil surges, stock futures slip after attack on Saudi facility

  • Oil prices surge on fears of global supply disruption
  • Safe haven gold, Japanese yen rise, stock futures slip
SYDNEY, AUSTRALIA: Oil prices surged to six-month highs on Monday while Wall Street futures fell and safe-haven bets returned after weekend attacks on Saudi Arabia’s crude facilities knocked out more than 5% of global oil supply.
US crude futures were last up 11% at $61.10 a barrel, coming off highs on expectations other global oil suppliers would step in to lift output. Brent crude soared 13% at $68.06 after earlier rising to $71.95.
Yemen’s Iran-backed Houthi rebel group had claimed responsibility for the attack, which hit the world’s biggest oil-processing facility but a senior US official told reporters on Sunday that evidence indicated Tehran was behind it.
The attacks heightened investor worries about the geopolitical situation in the region and worsening relations between Iran and the United States.
Those fears powered safe-haven assets with prices for gold climbing 1% in early Asian trade to $1,503.09.
Moves in Asian share markets were small, however, with Japan shut for a public holiday.
MSCI’s broadest index of Asia-Pacific shares outside Japan was a tick lower at 515.4. Australian shares were down 0.1% while South Korea’s KOSPI was a tad higher.
E-Minis for the S&P 500 were off 0.4% while those for the Dow eased 0.3%.
“If risk appetite collapses due to fears of worsening middle east tensions in the wake of any retaliation to the drone attacks, some emerging markets could face a double whammy of pressures,” said Mitul Kotecha, Singapore-based senior emerging markets stratgist at TD Securities.
“In Asia, the most risk sensitive currencies are Indian rupee, Indonesian rupiah and Philippine peso .”

Bonds and currencies
Among major currencies, the Saudi news pushed the yen up 0.4% to 107.64 per dollar while the Canadian dollar rose 0.5% in anticipation of higher oil prices.
The euro was little moved near a three-week top while the pound hovered near Friday’s two-month highs. That left the greenback down 0.15% at 98.105 against a basket of six major currencies.
The risk-sensitive Australian dollar was down 0.5% against the yen, snapping nine straight days of gains. The kiwi dollar slipped to a one-week low on the yen.
“One immediate question this (attack) poses for bond markets is whether a further rise in the inflation expectations component of bond yields — which have proved historically sensitive to oil prices — will give this month’s sharp bond market sell-off fresh impetus,” Attrill added.
“Or will safe haven considerations dominate to drive yields lower? Watch this space.”
In early Asian trading, futures for US 10-year Treasury notes rose 0.3%, indicating yields may slip when cash trading begins.
Global bonds were sold off last week, sending yields higher, led by a broader risk rally on hopes the United States and China would soon end their long trade war. Better-than-expected US retail sales data also boosted sentiment.
Chinese data for industrial production, retail sales and fixed asset investment will be released later on Monday, which could help set the tone for this week’s trade.
Investors also await the outcome of the US Federal Reserve’s policy meeting on Wednesday at which it is widely expected to ease interest rates and signal its future policy path.