Markets Brief: Egypt sells land, Lebanon’s black market, Aramco retail investors

Matthew Amlôt, Al Arabiya English

Samba Capital, the lead manager of the Saudi Aramco initial public offering (IPO) has announced the depth of retail subscriptions thus far. Meanwhile, Lebanon’s black market exchange rate soars to new heights. Egypt also announced plans to sell state-owned land in a bit to help finance the restructuring of its public sector companies.

Al Arabiya English has provided a news brief on all of this and more from global markets to developments in the Middle East.

Saudi Aramco’s IPO retail subscriptions reached $7.21 billion

Retail subscriptions to Saudi Aramco’s IPO have so far reached $7.21 billion from 3.1 million investors, said Samba Capital, the lead manager of the IPO. The retail subscription period of the IPO is due to end November 28.

Lebanon’s black market rates is soaring to new levels

The black market exchange rates for the Lebanese pound has soared to over 2,000 pounds to the dollar with some money exchangers reporting rates as high as LBP 2,200 to $1 – a near 50 percent jump from the official pegged rate of LBP 1,501-1514 to the dollar.

Saudi Arabia will lend Sudan $130 million

Saudi Arabia’s Finance Ministry announced in a statement that it would lend Sudan 487 million riyals ($130 million). The Saudi Fund for Development said that half of the amount would go to education, and the other half will be focused on healthcare.

Egypt is planning to sell off state-owned land

Egypt will soon begin selling off state-owned land to help finance the restructuring of public sector companies, the public enterprises minister said. He added that that country would also sell shares in Heliopolis Company For Housing and Development on the Egyptian stock exchange in the first quarter of 2020.

In the United States, the FAA ruled it would be sole issuer of new 737 MAX airworthiness certificates

The Federal Aviation Administration said it notified Boeing that the agency would be the sole issuer of airworthiness certificates for new 737 MAX planes, a role it had shared with the aircraft maker in the past. The 737 MAX has been grounded since March following crashes in Indonesia and Ethiopia killing 346 people.

Fitch says Aramco’s IPO proceeds could ease Saudi austerity measures

The Saudi Aramco IPO could help ease the economic effect of austerity measures as the country’s sovereign wealth fund would be able to boost domestic investments, said Fitch Ratings.

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.