Saudi Arabia

Aramco IPO has dug Saudi an even deeper hole

5 Dec 2019

The oil giant’s oversubscribed $25.6 billion listing was supposed to bring in foreign cash to diversify the kingdom away from oil. In the process, it has loaded up local investors with overvalued stock. Saudis have in one sense wound up more leveraged to crude prices, not less.

Aramco IPO could disappoint Saudi on a new front

26 Nov 2019

The oil giant has takers for most of its $25 bln offer. Yet its 1.5% listing is too small to give the local bourse a big bump up in MSCI’s key emerging-markets index. The gap between the 5% listing originally touted equates to tens of billions of dollars of foreign money inflows.

Saudi bankers’ sweat will lubricate Aramco IPO

20 Nov 2019

The kingdom’s lenders are extending credit to domestic investors buying into the oil giant’s $25 billion float. That means locals could face hefty margin calls if Aramco shares slump. Bankers’ best sedative is that Riyadh has very strong incentives to prop up the price.

Aramco’s $1.7 trln price tag pleases almost no one

17 Nov 2019

The Saudi oil giant will offer shares below the $2 trln valuation originally sought by the kingdom’s crown prince. But selling just a 1.5% slice implies the price range is still too rich for foreign investors. The mega-IPO is moving closer towards being a largely domestic affair.

Aramco has first-class seat on oil-tanker Titanic

11 Nov 2019

The Saudi giant’s IPO prospectus confirms it’s much more profitable than peers. Aramco also says a slump in oil demand could increase its market share. Yet the uncertain impact of such a shift ought to loom, iceberg-like, in investors’ minds as they weigh the company’s worth.

Viewsroom: When the CEO breaks the rules

7 Nov 2019

McDonald’s has provided a map for other firms after ousting boss Steve Easterbrook over a consensual relationship with an employee. Elsewhere, Aramco’s IPO and Fiat Chrysler’s merger with Peugeot. Plus: Breaking Japan’s love of hard cash.

Cox: Aramco is an ESG investor’s worst nightmare

7 Nov 2019

The Saudi oil giant’s business model is predicated on humans continuing to spew CO2 into the atmosphere. Its governance makes WeWork look benign. Its monarchy is overly tolerant of human rights abuses and beheadings. Fund managers with a conscience should boycott the deal.

Aramco’s intrepid investors are hedged in two ways

4 Nov 2019

Buying into the Saudi oil giant’s IPO means owning a tiny part of a state entity, with no control. Yet its pledge to pay a chunky $75 bln dividend for five years means punters are really preferred shareholders. A large retail offer could also limit Riyadh’s scope for rogue moves.

Saudi Arabia adds World Bank halo to FDI horns

24 Oct 2019

The kingdom is becoming a better place to do business, the global lender says. But both short and long-term data show it’s a long way from attracting the flows of foreign capital needed to make its Vision 2030 plan fly. That requires stability and wider reform. Saudi lacks both.

Aramco’s latest IPO delay is a triple fail

18 Oct 2019

It’s embarrassing enough that the Saudi oil giant has again postponed its float. The hitch also messes up the kingdom’s efforts to show its best side at an upcoming annual finance junket. And it undermines Saudi’s already-shaky attempts to attract more foreign investment.

Send the A-Team to Saudi’s “Davos in the Desert”

11 Oct 2019

Financiers are heading to Riyadh for the kingdom’s annual money bash. Given it’s only a year since Jamal Khashoggi was murdered by Saudi agents, they’re trotting out various rationales for attending. Weakest of them all is to send junior people: just put the CEO on a plane.

Angola’s answer to Aramco has similarly tricky IPO

9 Oct 2019

Like Saudi Arabia, the secretive African nation wants to float its state oil firm. With a possible $50 billion valuation, Sonangol is no minnow but years of delays suggest a 2022 listing deadline could slip. As with Riyadh, the long-term threat to oil gives good reason to hurry.

Ecuador exit an irksome speck in OPEC’s eye

2 Oct 2019

Saudi Arabia may shrug off the latest departure from the oil-producing group over which it presides. Ecuador has other priorities that make it expedient to detach. But the net effect is bad for OPEC, because it’s a reminder that the value of membership is dwindling.

Viewsroom: Not your mother’s oil shock

19 Sep 2019

Saudi Arabia is quickly repairing the damage drones inflicted on its oil industry. But the fallout has implications for everything from security to U.S. shale drillers to climate change-driven alternative energy. Plus: Why are AB InBev and ESR restarting Hong Kong listing plans?

Saudi Aramco is back, and a little less valuable

17 Sep 2019

The oil giant thinks its supplies will have fully recovered from drone attacks by the end of the month. That’s good for Aramco’s credibility, and also for a balanced global market. Yet investors now have a new risk to price in, and oil prices are more likely to remain subdued.

Oil market may help shale, not vice versa

16 Sep 2019

Producers of U.S. oil would struggle to ride to the rescue after attacks on Saudi oil fields put a question mark over the security of future supply. Even so, sustained high prices would be a happy outcome for companies that have a habit of digging themselves into a cash hole.

First oil cut isn’t the deepest for world economy

16 Sep 2019

Crude prices jumped almost 10% after weekend attacks on Saudi oil facilities took out over 5% of global supply. Though the spike is bad for already slowing global growth, reserves can make up for the shortfall. Escalating threats of Middle Eastern conflict would do more damage.

Drones detonate Saudi Aramco’s renewed IPO hopes

16 Sep 2019

Air strikes by Houthi rebels knocked out half the oil giant’s output. The drop should be temporary, and Saudi and OPEC peers need to cut production anyway to gee up crude prices amid weaker demand. Still, it’s another reason for investors to mind the risks of an Aramco listing.

Some Aramco IPO banks look more equal than others

12 Sep 2019

The Saudi oil giant has picked nine banks as global coordinators for its revived listing. They all get bragging rights. Yet despite the implied equality, they won't all do the same job. Banks that led the first stab at the IPO, like JPMorgan, will still probably call the shots.

Saudi’s new oil tsar makes a bad reshuffle worse

9 Sep 2019

Khalid al-Falih’s abrupt removal as energy minister follows the appointment of Crown Prince Mohammed bin Salman’s ally as chairman of oil juggernaut Aramco. The king and MbS call all the shots. But having a royal as the new oil supremo undercuts any gains from the new structure.