Aramco kicked off an oft-delayed initial public offering on Sunday, revealing potential tax cuts and dividends to lure investors.
Sept 11, 2019 - Saudi Aramco hires nine banks as joint global coordinators to lead its planned initial public offering, sources say.
The benchmark index is down almost a fifth since May as local institutions sold shares to prepare for the Aramco deal, fund managers and analysts say.
August 22, 2018 Saudi Arabia scraps plans for the domestic and worldwide listing of Aramco and advisers working on the listing have been disbanded as the kingdom shifts its attention to buying a stake in SABIC, sources said.
"The Capital Market Authority board has issued its resolution approving the Saudi Arabian Oil Co application for the registration and offering of part of its shares", the authority said in a statement.
"As the process has been delayed repeatedly and built up as such an integral component of the crown prince's plan to transform Saudi Arabia, global investors will pay very close attention to how Aramco performs on the domestic exchange", Ulrichsen told AFP.
No timeline for the IPO was provided.
Aramco pumps about 10 per cent of the world's oil from its wells beneath the desert sands - mostly in the kingdom's east but also in the evocatively named "Empty Quarter" in the south.
Bank of America (BOFA) Merrill Lynch estimates Aramco's valuation at $1.2 trillion to $2.3 trillion while EFG Hermes has a valuation of $1.55 trillion to $2.1 trillion, two fund managers who have seen the research reports told Reuters. Yet the Saudi government has already conceded the company probably isn't worth the $2 trillion valuation Prince Mohammed has long advocated.
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But a shifting deadline could also reduce pressure on both sides to cut an initial deal and move on to more comprehensive talks. But wrapping up even that limited work by the November 16-17 summit in Chile had always been seen as a challenge.
The physical damage may have been largely repaired, but investors will probably remain anxious that its facilities remain vulnerable to another assault, given the political tensions between Saudi Arabia and its neighbors.
It experienced a major setback in September when an Aramco oil field and facility were attacked, affecting more than half of Saudi Arabia's oil exports.
The prospect of the world's largest oil company selling a piece of itself has had Wall Street on tenterhooks since Prince Mohammed flagged it three years ago. More than 20 have been mandated, with the top roles going to firms including Citigroup Inc., Goldman Sachs and JPMorgan Chase. A $75 billion dividend would therefore imply a valuation of well below $1.5 trillion, let alone $2 trillion.
Responding to a journalist's question about the safety of an Aramco investment, al-Rumayyan spoke about how quickly the company restored production after the attack.
Trading is expected to begin in December.
Initial hopes for a blockbuster worldwide listing of about 5 percent were dashed when the share sale was halted previous year amid debate over where to list Aramco overseas.
Those measures would have boosted free cash flow by $4.5 billion in the first six months of this year, the company said in the intention to float document.
Aramco's 2018 net profit of $111.1 billion is higher than the profits of Apple, Google and Exxon Mobil combined. Those companies have been raising payouts to shareholders to counter rising pressure from climate activism.
Aramco said on Sunday it meant to declare aggregate ordinary cash dividends of at least $75 billion in 2020. At US$1.8 trillion that would mean a yield of 4.4%, a decent payout in a low interest rate world, but still lower than the 5% Exxon investors now get. Shell's dividend yield is over 6%, according to Refinitiv data.