Oil & Energy Investor by Dr. Kent Moors

Why the Aramco IPO Doesn’t Impress Me… Yet

by | published December 11th, 2019

Trade on the Tadawul, the local Saudi stock exchange, began today for the largest Initial Placement Offer (IPO) in history.

Following the initial trading, Saudi Arabia has touted the IPO in mega state oil company Aramco as a success.

And at a glance, this assessment appears to be on target.

The first major success is this: It happened. For the first time the Saudis have allowed private ownership of a state-run enterprise, although admittedly less than 2% of it.

Then there is the valuation. Selling three billion shares at 32 riyals ($8.53) each amounts to $25.6 billion. That makes this IPO the largest IPO in history, eclipsing even the float of Alibaba back in 2014, which was valued at $21.8 billion.

It also puts an overall value on Aramco of $1.7 trillion, making it, once again, the largest ever seen and close to the $2 trillion initially projected by Crown Prince Mohammad bin Salman (MbS) prior to the first abortive attempt at an IPO over two years ago.

In addition, global interest may well increase the number of shares available from the placement. Currently, the number of shares amounts to only about 1.5% of the company. That could increase to about 2% if an option to sell additional shares is exercised. And there is some evidence that the outside interest is growing.

However, despite all this positive success, the downside of this IPO didn’t take long to emerge

The Situation Room: The Aramco IPO Finally Takes Off

by | published December 9th, 2019

Welcome back from the weekend, Oil & Energy Investors.

It’s gearing up to be a busy week, what with recent geopolitical events, and my travel schedule. I’ll be heading up to Baltimore this week to meet with my team to discuss some exciting new developments for you.

Beyond that, my analysis this week will span the globe, from Saudi Arabia to the UK, and all with significant potential impacts on the oil and energy markets.

Below are my top two focus points for this week.

So, let’s take a look…