Saudi Arabia is considering a dual listing as a way to reach investors beyond the local stock market for the sale of shares in the state-owned oil giant Aramco, which could be the world’s largest initial public offering, the kingdom’s deputy crown prince said.
“We are thinking about several options,” said Prince Mohammed bin Salman, who heads Saudi Arabian Oil Co’s supreme council. “Either it will be double listed or maybe we can have a fund in the US market that can only trade and invest in Saudi Aramco, like some of the funds that are already out there that trade in gold or oil,” he said, without giving further details.
Prince Mohammed is leading the planning for the sale of less than 5 per cent in Aramco, which is targeted for 2017-18. It could raise as much as US$106 billion, according to the Sovereign Wealth Fund Institute, making the company the largest publicly traded one in the world, with a market capitalisation of more than $2 trillion. Even a small stake would dominate the tightly regulated Saudi stock market, the Tadawul, which has a capitalisation of $398bn.
“If speculation of the size of the deal is correct, they will have to look for liquidity outside the kingdom,” said James Bannan at Coeli Asset Management. “Some structure in the US or London makes sense,” he added.
The Tadawul All-Share Index is down more than 30 per cent over the past year.
Chinese officials early this year pitched a dual listing to Saudi officials that would put Aramco’s shares on both the Hong Kong and Saudi exchanges in return for anchor investments from Chinese funds. There has been no word yet of any Saudi reaction to the offer.
The Aramco placement could dwarf the $25bn public offering in 2014 by Alibaba Group Holding, the world’s largest, and Facebook’s $16bn share sale. But it is difficult to determine how much foreign investors would be willing to pay since Aramco has never published financial information. Many state-run oil companies trade at substantial discounts to their private sector competitors.
“They need to treat the IPO, even if done locally, as if it’s a dual listing in terms of transparency and governance,” said John Sfakianakis, the Riyadh-based director of economics research at the Gulf Research Center, a think tank. “A level playing field for all has to be there from the start.”
In the Saudi market, foreign participation remains restricted. Since it was opened to some direct foreign investment in June, fewer than a dozen overseas investors have received licences to trade in the market.
“If the listing is on the Saudi stock exchange alone, there will always be question marks on transparency, question marks on who will be able to invest in terms of foreign investors,” said Ghanem Nuseibeh, the founder of the London consulting firm Cornerstone Global Associates.
“A dual listing or listing in a foreign jurisdiction will give a greater degree of confidence, particularly when it comes to foreign investors. But then again, that will come at a price in what the government is prepared to disclose in terms of Aramco,” he added.
The kingdom chose JP Morgan Chase and Michael Klein, the former Citigroup investment banker who runs his own boutique, to advise on the Aramco offering. Mr Klein is providing strategic advice to the government, while JP Morgan is working on preparations for the IPO and may be among the banks that underwrite the listing. The deliberations are still at an early stage, and no final decisions about the IPO have been made.
By selling shares in Aramco, Prince Mohammed will give investors a stake in the world’s biggest oilfields and expose the assets that underpin the kingdom’s entire economy to unprecedented scrutiny. The planned sale has also prompted concerns at home about how the company will be run once the stake is sold.
The sale is a key part of his broader plan to reduce the country’s dependence on oil. He also aims to transform Aramco from an oil company into an energy and industrial conglomerate.
The government plans for Aramco to become a holding company that has stakes in its subsidiaries without being directly involved in managing them, Prince Mohammed said. “Our main goal is to sell a stake in Aramco to the public and then sell also the subsidiaries of Aramco in a public offering including its refineries,” he said.
The remaining Aramco stake not sold in the IPO, which is now held directly by the government, will be transferred to the country’s sovereign wealth fund. Prince Mohammed said the shift would make the fund the world’s largest by far with more than $2tn in assets.
Income from that fund would help Saudi Arabia cope with the steep drop in oil prices since 2014. It is already cutting subsidies on electricity, fuel and water as part of the biggest economic shake-up since the founding of the kingdom that has spread the burden of lower crude prices among a more of the general population.
The sale is a key part of his broader plan to reduce the country’s dependence on oil.
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Feeding the thousands for iftar
Six industrial scale vats of 500litres each are used to cook the kanji or broth
Each vat contains kanji or porridge to feed 1,000 people
The rice porridge is poured into a 500ml plastic box
350 plastic tubs are placed in one container trolley
Each aluminium container trolley weighing 300kg is unloaded by a small crane fitted on a truck
COMPANY%20PROFILE%20
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The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
The specs: 2018 Mercedes-Benz GLA
Price, base / as tested Dh150,900 / Dh173,600
Engine 2.0L inline four-cylinder
Transmission Seven-speed automatic
Power 211hp @ 5,500rpm
Torque 350Nm @ 1,200rpm
Fuel economy, combined 6.4L / 100km
Emergency phone numbers in the UAE
Estijaba – 8001717 – number to call to request coronavirus testing
Ministry of Health and Prevention – 80011111
Dubai Health Authority – 800342 – The number to book a free video or voice consultation with a doctor or connect to a local health centre
Emirates airline – 600555555
Etihad Airways – 600555666
Ambulance – 998
Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries
COMPANY%20PROFILE
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Ain Dubai in numbers
126: The length in metres of the legs supporting the structure
1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch
16 A380 Airbuses: The equivalent weight of the wheel rim.
9,000 tonnes: The amount of steel used to construct the project.
5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place
192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.
Results
6.30pm Madjani Stakes Rated Conditions (PA) I Dh160,000 I 1,900m I Winner: Mawahib, Tadhg O’Shea (jockey), Eric Lemartinel (trainer)
7.05pm Maiden Dh150,000 I 1,400m I Winner One Season, Antonio Fresu, Satish Seemar
7.40pm: Maiden Dh150,000 I 2,000m I Winner Street Of Dreams, Pat Dobbs, Doug Watson
8.15pm Dubai Creek Listed I Dh250,000 I 1,600m I Winner Heavy Metal, Royston Ffrench, Salem bin Ghadayer
8.50pm The Entisar Listed I Dh250,000 I 2,000m I Winner Etijaah, Dane O’Neill, Doug Watson
9.25pm The Garhoud Listed I Dh250,000 I 1,200m I Winner Muarrab, Dane O’Neill, Ali Rashid Al Raihe
10pm Handicap I Dh160,000 I 1,600m I Winner Sea Skimmer, Patrick Cosgrave, Helal Al Alawi
Ticket prices
- Golden circle - Dh995
- Floor Standing - Dh495
- Lower Bowl Platinum - Dh95
- Lower Bowl premium - Dh795
- Lower Bowl Plus - Dh695
- Lower Bowl Standard- Dh595
- Upper Bowl Premium - Dh395
- Upper Bowl standard - Dh295
Farasan Boat: 128km Away from Anchorage
Director: Mowaffaq Alobaid
Stars: Abdulaziz Almadhi, Mohammed Al Akkasi, Ali Al Suhaibani
Rating: 4/5
Company%20Profile
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If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
COMPANY%20PROFILE
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The%20specs
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Three trading apps to try
Sharad Nair recommends three investment apps for UAE residents:
- For beginners or people who want to start investing with limited capital, Mr Nair suggests eToro. “The low fees and low minimum balance requirements make the platform more accessible,” he says. “The user interface is straightforward to understand and operate, while its social element may help ease beginners into the idea of investing money by looking to a virtual community.”
- If you’re an experienced investor, and have $10,000 or more to invest, consider Saxo Bank. “Saxo Bank offers a more comprehensive trading platform with advanced features and insight for more experienced users. It offers a more personalised approach to opening and operating an account on their platform,” he says.
- Finally, StashAway could work for those who want a hands-off approach to their investing. “It removes one of the biggest challenges for novice traders: picking the securities in their portfolio,” Mr Nair says. “A goal-based approach or view towards investing can help motivate residents who may usually shy away from investment platforms.”
Company%20Profile
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The specs
Engine: Direct injection 4-cylinder 1.4-litre
Power: 150hp
Torque: 250Nm
Price: From Dh139,000
On sale: Now
FIXTURES
Saturday, November 3
Japan v New Zealand
Wales v Scotland
England v South Africa
Ireland v Italy
Saturday, November 10
Italy v Georgia
Scotland v Fiji
England v New Zealand
Wales v Australia
Ireland v Argentina
France v South Africa
Saturday, November 17
Italy v Australia
Wales v Tonga
England v Japan
Scotland v South Africa
Ireland v New Zealand
Saturday, November 24
|Italy v New Zealand
Scotland v Argentina
England v Australia
Wales v South Africa
Ireland v United States
France v Fiji
Name: Brendalle Belaza
From: Crossing Rubber, Philippines
Arrived in the UAE: 2007
Favourite place in Abu Dhabi: NYUAD campus
Favourite photography style: Street photography
Favourite book: Harry Potter
The Intruder
Director: Deon Taylor
Starring: Dennis Quaid, Michael Ealy, Meagan Good
One star
Roger Federer's 2018 record
Australian Open Champion
Rotterdam Champion
Indian Wells Runner-up
Miami Second round
Stuttgart Champion
Halle Runner-up
Wimbledon Quarter-finals
Cincinnati Runner-up
US Open Fourth round
Shanghai Semi-finals
Basel Champion
Paris Masters Semi-finals
Squid Game season two
Director: Hwang Dong-hyuk
Stars: Lee Jung-jae, Wi Ha-joon and Lee Byung-hun
Rating: 4.5/5
The specs
Engine: 0.8-litre four cylinder
Power: 70bhp
Torque: 66Nm
Transmission: four-speed manual
Price: $1,075 new in 1967, now valued at $40,000
On sale: Models from 1966 to 1970
if you go
The flights
Air France offer flights from Dubai and Abu Dhabi to Cayenne, connecting in Paris from Dh7,300.
The tour
Cox & Kings (coxandkings.com) has a 14-night Hidden Guianas tour of Guyana, Suriname and French Guiana. It includes accommodation, domestic flights, transfers, a local tour manager and guided sightseeing. Contact for price.
