Saudi Aramco ex­ceeds tar­get as re­tail sub­scrip­tions end

The National - News - - BUSINESS - THE NA­TIONAL

Sub­scrip­tions and bids for Saudi Aramco’s ini­tial pub­lic of­fer­ing reached 166.03 bil­lion Saudi riyals (Dh162.57bn) by Fri­day, ex­ceed­ing its tar­get of 96bn riyals, ac­cord­ing to lead ar­rangers Samba Cap­i­tal and NCB Cap­i­tal.

In the first 12 days, in­sti­tu­tional bids reached 118bn riyals at 5pm Saudi time on Fri­day, with book-build­ing set to close on Wed­nes­day.

More than half, or 54 per cent, of in­sti­tu­tional bids came from

Saudi cor­po­rate in­vestors, with Saudi funds, DPMs (Dis­cre­tionary Port­fo­lio Man­agers) and au­tho­rised peo­ples ac­count­ing for 24.1 per cent. Saudi gov­ern­ment-re­lated en­ti­ties ac­counted for 11.1 per cent, with non-Saudi in­vestors, in­clud­ing those from the GCC, qual­i­fied in­vestors and swaps ac­count­ing for 10.5 per cent.

Re­tail sub­scrip­tions reached 47bn riyals, or 1,481,613,280 shares.

The high sub­scrip­tion rates from re­tail in­vestors were an in­di­ca­tion of success and a “sig­nal of con­fi­dence” in a com­pany that has “un­ri­valled stand­ing glob­ally in the en­ergy sec­tor”, said Samba Cap­i­tal deputy chair­woman Ra­nia Nashar.

Aramco is the most prof­itable com­mer­cial en­tity in the world, beat­ing the likes of Ap­ple, Google and Ama­zon. It recorded a $68bn profit for the first nine months of the year on rev­enue of $217.1bn. A de­but $12bn bond is­sued by the com­pany in April was more than 10 times over­sub­scribed.

The oil gi­ant, which has one of the high­est rev­enue streams in the world, ac­counts for one in ev­ery eight bar­rels of crude. In 2018, the com­pany pro­duced 13.6 mil­lion bar­rels per day of oil equiv­a­lent, in­clud­ing 10.3 mil­lion bpd of crude.

Aramco be­gan the much-an­tic­i­pated IPO process on Novem­ber 3. It set a price range of 30-32 riyals per share, giv­ing the com­pany an in­dica­tive val­u­a­tion of $1.6 tril­lion to $1.7tn. The fi­nal price is set to be an­nounced on Thurs­day, af­ter bids from in­sti­tu­tional in­vestors close.

“The success of the re­tail tranche is mir­rored in the in­sti­tu­tional tranche where bids re­flect strong de­mand com­ing from across the spec­trum of investor cat­e­gories, re­flec­tive of Aramco’s com­pelling in­vest­ment propo­si­tion,” said NCB Cap­i­tal chief ex­ec­u­tive Sarah Al Suhaimi. “This in­sti­tu­tional de­mand also speaks well to the depth and di­ver­si­fi­ca­tion of the Saudi cap­i­tal mar­kets and its investor base,” she added.

A note on the Aramco IPO pub­lished by Dubai fund man­ager Dalma Cap­i­tal stated that once floated, Aramco would com­prise be­tween 9.3 per cent to 9.9 per cent of the Tadawul All-Share in­dex. It is likely to at­tract for­eign in­flows of $3.2bn to $3.4bn from funds track­ing the MSCI and FTSE Rus­sell in­dexes.


People check an an­nounce­ment on Aramco’s pub­lic of­fer­ing on an in­vest­ment services web­site in Riyadh

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