Aramco to transform global stocks

Company’s market capitalisation expected to be almost twice that of Apple

Money managers in the Middle East are confident the sale of governmentowned Saudi Arabian Oil Co this year will shake up the global stock market with a record initial public offering that gives the world’s biggest company a valuation of about $1.5 trillion (Dh5.5 trillion).

“People focus on Aramco as being the key thing,” said Salman Bajwa, chief executive officer of Emirates NBD Asset Management Ltd, which has $4.8 billion of assets. “In our eyes, it is just one of the several major changes taking place. We have landmark reforms going in the social, economic and markets space. The Aramco IPO will be the confirmation that one phase of structural reforms in the markets Saudi Arabia’s oil minister said the initial public offering of oil giant Aramco will take place “when the time is right,” revealing the first crack in the kingdom’s earlier plan to debut the company this year.

“We hope that 2018 will be the right time but ultimately we have to make sure the market is ready,” Khalid Al Falih said in Davos, Switzerland, on Wednesday when asked if he was pointing to a delay.

“We’re ready for the listing but we have to be sure the market is ready, that the time is right, and we will calibrate that as we get closer,” he told reporters at the World Economic Forum in Davos.

The comments were the first wobble in Riyadh’s long-standing assurances that the IPO was “on track and on time” for the second half of 2018. The Saudi Arabian Oil Co offering would be one of the biggest events in financial markets this year and any alteration is of significant interest to global investors. space has been successfully completed” because “there are going to be other IPOs, many of state-owned entities”, Bajwa said in an interview last week.

The market capitalisation of Aramco will be almost twice that of Apple, four times bigger than ExxonMobil and at least onefifth of the $5.8-trillion MSCI Emerging Markets Index, the benchmark for emerging markets, according to data compiled by Bloomberg. At the same time, Saudi Arabia plans to create the largest sovereign wealth fund and sell hundreds of state assets, including stakes in the stock exchange, football clubs and flour mills. Aramco is ready for its IPO in the second half, chief executive officer Amin Nasser said last week.