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Tom Kirkman posted an update 6 years, 1 month ago
While it is not at all surprising that Saudi Arabia has pretty much decided not to take their Aramco IPO to New York, London, or Hong Kong, it *is* surprising to me that they may offer the IPO on their own fledgling, domestic Saudi Arabia stock exchange.
I’ve been guestimating that KSA and MbS may take the IPO offer to state players such as China or Russia, to avoid the scrutiny that would be required in full transparency of KSA state secrets such as the actual reserves and decline rates of their oil.
Looks like that option didn’t generate interest from state players, so it seems that MbS option of last resort is to offer the IPO on Saudi stock exchange. This doesn’t look promising.
Aramco Kills Massive Offshore IPO, Will Only Offer Shares DomesticallyAramco has nixed plans to list shares in either the US, UK or Hong Kong - and will instead restrict its IPO to the domestic market...
I was under the impression that half of the Saudi population receives social welfare backed by the oil industry – if this is false please correct. So, isn’t this a little like going IPO an buying the shares with your own money?
What is the benefit to Aramco with this move?
You are correct about the social welfare.
So far, near as I can tell, MbS (the crown prince) got spooked by the full disclosures that would be required by listing on NY and London stock exchanges, and state players don’t seem to be eager to snap up shares. China in particular appears standoffish.
Perhaps MbS plans to have the IPO on the Saudi stock exchange but sell to international investors. That probably won’t work out very well. KSA is not exactly known for transparency, or for its stock exchange.
Nobody believes the grossly inflated $2 trillion valuation, especially when Aramco has been using enhanced oil recovery for years already.
Waiting to see what will happen next, if the proposal to have the Aramco IPO on the Saudi stock exchange gets mocked by international press.