DAVOS: Some of the world’s leading investment bankers will go direct from Davos to Riyadh to take part in a “beauty parade” in front of Saudi Aramco officials to pitch for lucrative roles in the oil company’s planned initial public offering (IPO) later this year.
One banking chief, speaking on the sidelines of the World Economic Forum annual meeting in Switzerland, said that he and fellow executives were preparing to travel to the Kingdom early next week for a round of presentations in response to “request for proposal” invitations from Aramco.
Some of the biggest banks in the world are believed to be making the trip. In addition to HSBC, JP Morgan and Morgan Stanley, all of whom have already been working to advise the Saudis on the IPO, American banks Goldman Sachs and Citibank are believed to be pitching for the next phase of the process. The German giant Deutsche Bank is also believed to be involved in the presentations.
“If you’ve got ambition in the banking world you have to be involved in this. Everbody wants to be there. It’s the biggest privatization in history,” the banker said, speaking on condition of anonymity because of the delicate stage the IPO plans have reached.
The next phase — after advisers are chosen — will involve hard decisions on the venue for the listing, as well as possible proposals to sell some shares in Aramco to Russian and Chinese investors. In Davos this week it emerged that Russian investors had approached Aramco to discuss a possible share sale, possibly alongside Chinese investors.
The contest to stage the IPO — which could amount to $100 billion (SR374.8 billion) in value if the official valuation is met — appears to have come down to a choice between New York and London, in addition to a listing on the Riyadh stock exchange, the Tadawul. Hong Kong is also a possibility, especially if a big Chinese investor emerges.
The banker said he thought London was the favorite at this stage, mainly because of legal and regulatory hurdles in the US, though he stressed the decision was as much political as financial.
“New York presents a range of problems, with Sarbanes-Oxley (US investor protection laws), as well as Jasta (anti-terrorism financing legislation) and the whole system of class actions. The London legal system is different in many respects,” he said.
Aramco officials are using the opportunity of the Davos meeting to meet advisers and other potential stakeholders about the IPO.
Big banks head to Riyadh from Davos for Saudi Aramco ‘beauty parade’
Big banks head to Riyadh from Davos for Saudi Aramco ‘beauty parade’
Closing Bell: Saudi main market edges up to 10,745 points
RIYADH: Saudi equities closed higher on Monday, with the Tadawul All Share Index finishing up 135.69 points, or 1.28 percent, at 10,745.45.
The MSCI Tadawul 30 Index also advanced, rising 22.21 points, or 1.57 percent, to close at 1,436.31, while the Nomu Parallel Market Index slipped 31.80 points, or 0.13 percent, to 23,586.94.
Market breadth was positive on the main market, with 216 gainers against 42 decliners, while Nomu saw 42 stocks advancing and 36 declining.
Trading activity picked up, with 261.7 million shares changing hands, while total turnover reached SR5.10 billion ($1.3 billion).
Among the top performers, Saudi Fisheries Co. led the gains, closing at SR63.90, up SR5.80, or 9.98 percent. Naseej International Trading Co. rose to SR34.94, gaining SR3.16, or 9.94 percent, while Dar Al Arkan Real Estate Development Co. ended at SR16.74, up SR1.16, or 7.45 percent.
Zahrat Al Waha for Trading Co. added 6.84 percent to close at SR2.50, and Alamar Foods Co. climbed 5.75 percent to SR42.70.
On the losing side, Al Masar Al Shamil Education Co. fell 4.36 percent to SR23.90, while Saudi Paper Manufacturing Co. declined 2.82 percent to SR62.05.
United International Holding Co. slipped 2.36 percent to SR153.40, Saudi Aramco Base Oil Co. dropped 2.09 percent to SR98.60, and United Electronics Co. eased 1.90 percent to SR85.00.
On the announcement front, Mouwasat Medical Services Co. announced that its board has approved the establishment of a new hospital in Riyadh’s Al-Narjis District, with a planned capacity of 280 beds and a total investment cost of SR900 million.
The project will be financed through a mix of self-funding and long-term Shariah-compliant bank facilities, with further details on timelines and financial impact to be disclosed at a later stage.
Shares of Mouwasat Medical Services Co. closed at SR67.95, gaining SR1.40, or 2.10 percent.
Saudi Arabian Mining Co. reported a net addition of 7.8 million ounces of new gold resources following extensive exploration and drilling activities across multiple sites, alongside the identification of new mineralization opportunities in gold and base metals.
The company noted that the financial impact of these discoveries has yet to be determined and will be assessed in due course.
Shares of Saudi Arabian Mining Co. closed at SR67.50, up SR3.05, or 4.73 percent.
