Excitement builds over Aramco IPO
Saudi oil giant’s board is expected to meet with its advisers around October 17
Nawaf Abdul Aziz has never put any money into the stock market before, but he says buying shares in the world’s most profitable company is a no-brainer.
The 29-year-old engineer from Riyadh is among the Saudi faithful waiting to get a piece of Crown Prince Mohammad Bin Salman’s much vaunted — and delayed — sale of a stake in oil giant Aramco. The initial public offering, likely the biggest in history, is expected to get the green light in coming days.
“It’s not a random investment,” said Abdul Aziz, as he and a friend waited for a table
at a burger and sushi place in a swanky open-air mall in the Saudi capital. “The company has a history. It’s very stable. We can see where they’re headed.”
The frenzy of excitement across the kingdom and social media over the IPO is only eclipsed by its importance. Indeed, in Saudi Arabia there’s a fine line between savvy investing and patriotic duty when your leader has so much riding on its success.
Aramco underpins Prince Mohammad’s overhaul of the economy that’s now into its fourth year. For the crown prince, it’s all about Saudi Arabia’s transition to Western-style capitalism.
The next stage is to turn people into shareholders.
Hurdles
The IPO plan will still face significant hurdles, including the ability of the kingdom to achieve the $2 trillion valuation it’s been seeking for the company.
In Riyadh, one Saudi businessman said there’s still some uncertainty over the financial allure to local investors even after the announcement of Aramco’s intention to pay out $75 billion in dividends next year.
Saudi Aramco’s board is expected to meet with its advisers around October 17, according to people familiar with the planning.