Aramco to list two percent on the Saudi Stock Exchange: Report

Staff writer, Al Arabiya English

Saudi Aramco is expected to list two percent of its shares on the Saudi Stock Exchange (Tadawul), Reuters has reported, citing unnamed sources familiar with the matter.

The retail subscription period of the oil company's initial public offering (IPO) will end on November 26, Reuters added.

Analysts have long suggested that the government would likely elect to list between 1-3 percent on the Tadawul.

Aramco started its domestic IPO process on Sunday following a conference featuring comments from the Chairman of Aramco and Governor of the Saudi Arabian sovereign wealth fund, the Public Investment Fund, Yassir al-Rumayyan, and CEO of Aramco Amin Nasser.

In an exclusive interview with Al Arabiya, al-Rumayyan said that investments into Aramco will come from “anywhere in the world.”

“To strengthen the Tadawul, and Saudi Arabia as a foreign investment destination, listing Saudi Aramco now is important,” Nasser added during the conference.

Aramco also reported on Sunday a net profit of $68 billion for the first nine months of 2019, making it the most profitable company in the world by a significant margin.

The investor roadshow is due to start on November 18, the sources added, with final pricing scheduled for December 5, and trading expected to start December 11.

 

FAQ's

Saudi Aramco is the Kingdom’s state-owned energy company and the world’s biggest oil producer. In November, the company reported a profit of $68 billion for the first nine months of 2019 – making it the most profitable company in the world.
An initial public offering (IPO) is the process by which a company sells a portion of its ownership (shares) to public investors to raise funds (also known as capital). The company sells its shares by listing them on a public stock exchange, where investors can purchase them.
"I am honored to announce that Saudi Aramco will become a listed company on the Saudi Stock Exchange,” Chairman Yassir al-Rumayyan said in early November. The exact percentage of the company and the possibility of another listing on a foreign exchange are both still unknown details, however.
Senior Saudi Arabian authorities have targeted a $2 trillion valuation. At this valuation, a 5 percent listing would raise $100 billion in funds – dwarfing any other IPO in history. However, some analysts and investment banks have predicted a range closer to between $1.2 and $1.5 trillion.
The IPO prospectus is expected to be released on November 10, with pricing expected November 17. Meanwhile, the float is expected to take place on December 4, followed by trading on December 11.
The IPO is part of Saudi Arabia’s overall strategy to transition into a post-hydrocarbon age. The income generated would be funneled into the Public Investment Fund (PIF), the Kingdom’s sovereign wealth fund (SWF). Saudi Arabia’s Vision 2030 plans to transform the PIF into a giant investment vehicle to help the country diversify its economy and reduce its reliance on oil revenues.
Saudi Vision 2030 is the Kingdom’s ambitious plan to diversify its economy by reducing dependence on oil and developing non-oil sectors ranging from healthcare to mining. The IPO is seen as a cornerstone of Vision 2030, boosting the PIF as the long-term investment vehicle for the Kingdom.

Saudi Arabia’s Crown Prince Mohammed bin Salman

- The Crown Prince is the architect of Vision 2030 and originally announced plans to list shares of Saudi Aramco in 2016.

Prince Abdulaziz bin Salman, Saudi Arabia’s Energy Minister

- Prince Abdulaziz assumed the role of energy minister in September of this year, replacing Khalid al-Falih.

Yasir al-Rumayyan, Chairman, Aramco

- Al-Rumayyan became chairman of Aramco’s board in September. He is best known as governor of the PIF, a role he continues to hold.

Amin Nasser, President and CEO, Aramco

- Nasser has been with Aramco for more than three decades and has held numerous leadership positions.