Saudi Tadawul to limit Aramco index weighting with cap

The Aramco IPO is seen as a test for the Saudi exchange, where the largest listing so far has been worth $6 billion. (Reuters)
Updated 02 December 2019

Saudi Tadawul to limit Aramco index weighting with cap

  • State-owned oil firm Aramco is expected to list 1.5 percent of its shares this month
  • Institutional bids during the first 15 days of the bookbuilding period amounted to SR144.16 billion

DUBAI: Saudi Arabia’s Tadawul has introduced an equity index cap of 15 percent which is set to address concerns over the weighting oil giant Saudi Aramco will have when it lists on the exchange.
State-owned oil firm Aramco is expected to list 1.5 percent of its shares this month in a deal which could raise more than $25 billion and top the record initial public offering (IPO) of Chinese retailer Alibaba on the New York Stock Exchange in 2014.
Samba Capital, NCB Capital and HSBC Saudi Arabia, the joint financial advisors and joint global coordinators for Saudi Aramco’s initial offering, said on Monday that institutional bids during the first 15 days of the bookbuilding period amounted to SR144.16 billion, with 4.551 billion shares subscribed for.
The institutional bookbuilding period continues until December 4, 2019.
The Aramco IPO is seen as a test for the Saudi exchange, where the largest listing so far has been worth $6 billion.
“Any constituent whose index weight reaches or exceeds the threshold will be capped in accordance with the set limit,” Tadawul said in a statement on Monday.
The move is part of a broader update of Tadawul’s index methodology, including a revision of the free float shares calculation methodology for shares owned by government entities.
The new measures will “ensure more balanced indices, which will accurately represent the movement of the market, enhance disclosures and transparency and minimize securities’ dominance,” Tadawul’s CEO Khalid Al-Hussan said in a statement.
Tadawul also said it has applied a new “Fast Entry” rule allowing shares of IPOs to be included in the all-share equity index at the close of the fifth trading day.
The updates will be effective by the end of the year.


BT warns UK that banning Huawei too fast could cause outages

Updated 13 July 2020

BT warns UK that banning Huawei too fast could cause outages

  • Prime Minister Boris Johnson is due to decide this week whether to impose tougher restrictions on Huawei
  • British PM in January granted Huawei a limited role in the 5G network

LONDON: BT CEO Philip Jansen urged the British government on Monday not to move too fast to ban China’s Huawei from the 5G network, cautioning that there could be outages and even security issues if it did.
Prime Minister Boris Johnson is due to decide this week whether to impose tougher restrictions on Huawei, after intense pressure from the United States to ban the Chinese telecoms behemoth from Western 5G networks.
Johnson in January defied President Donald Trump and granted Huawei a limited role in the 5G network, but the perception that China did not tell the whole truth over the coronavirus crisis and a row over Hong Kong has changed the mood in London.
“If you are to try not to have Huawei at all, ideally we would want seven years and we could probably do it in five,” Jansen told BBC radio.
Asked what the risks would be if telecoms operators were told to do it in less than five years, Jansen said: “We need to make sure that any change of direction does not lead to more risk in the short term.”
“If we get to a situation where things need to go very, very fast, then you are into a situation where potentially service for 24 million BT Group mobile customers is put into question — outages,” he said.
In what some have compared to the Cold War antagonism with the Soviet Union, the United States is worried that 5G dominance is a milestone toward Chinese technological supremacy that could define the geopolitics of the 21st century.
The United States says Huawei is an agent of the Chinese Communist State and cannot be trusted.
Huawei, the world’s biggest producer of telecoms equipment, has said the United States wants to frustrate its growth because no US company could offer the same range of technology at a competitive price.