Saudis scramble to raise cash for Saudi Aramco share sale

Aramco said it plans to sell an unspecified number of shares on the Saudi stock exchange Tadawul. (AFP)
Updated 08 November 2019

Saudis scramble to raise cash for Saudi Aramco share sale

RIYADH: From tapping lenders to selling personal assets, Saudis are scrambling to raise cash to invest in Saudi Aramco stocks after the oil giant announced its blockbuster market debut.

The company said it plans to sell an unspecified number of shares on the Saudi stock exchange Tadawul. Retail investors in Saudi Arabia still appear to be salivating at the prospect of owning a piece of the world’s most profitable company.

“Some (Saudis) have started to sell other stocks in preparation to buy Aramco (shares),” said Ibrahim Ahmed, a Saudi energy industry analyst who is also considering investing his savings.

“People look at it as a sound investment. (But) I’m aware that it is a long-term investment that is good to have in a portfolio and not some kind of lottery ticket.”

Fahad Hashemi, portfolio manager at the Riyadh-based Middle East Financial Investment Co, said his firm had a “strong intention” to participate.

Eid Al-Shamri, chief executive of investment bank Ithraa Capital, said some Saudis were considering selling their homes or borrowing money to purchase shares.

“This is definitely a serious event that will be recorded in the history of Saudi Arabia,” Shamri told Bloomberg News. “A lot of people are talking about it. But what is the extent of the people’s participation? We are tightening our belts.”

In a 21-page document released by the company, the company called the IPO a “unique investment proposition.”

Aramco Chief Executive Amin Nasser said the company was committed to offer shareholders “long-term value creation.”

To promote participation by all sections of Saudi society, divorced women or widows with minors will be eligible to receive bonus shares, local media reported.


ADB to invest $2 billion in Pakistan’s energy sector

Updated 26 min 23 sec ago

ADB to invest $2 billion in Pakistan’s energy sector

  • Pakistan’s energy sector is facing a cash shortfall of Rs12 billion per month, down from Rs39 billion
  • ADB is interested in facilitating technical studies for gas storage facilities

KARACHI: The Asian Development Bank (ADB) plans to invest $2 billion in Pakistan’s energy sector within the next three years, as the South Asian nation’s power supply chain is paralyzed by Rs12 billion a month in circular debt, the Ministry of Energy said in a statement.
After a Wednesday meeting with Energy Minister Omar Ayub Khan and Special Assistant to the Prime Minister on Petroleum Nadeem Babar, the ADB’s team, headed by its director for Central and West Asia, Werner Liepach, also expressed interest in facilitating technical studies for gas storage, as Pakistan is facing a gas deficit.
The Asian lender this week released $1 billion to shore up the Pakistan’s public finances and help strengthen its slowing economy, while another $300 million were released to help the government address financial sustainability, governance, and energy infrastructure policy constraints in the energy sector.
In July, the International Monetary Fund (IMF) approved a three-year $6 billion extended fund facility (EFF) to finance the government’s economic reform program that aims to put Pakistan’s economy on the path of sustainable and inclusive growth. The bailout program is expected to catalyze at least $38 billion in financing from Pakistan’s development partners.
The ADB, Pakistan’s top energy sector partner with a $2.1 billion portfolio discussed energy sector projects with the ministry’s Power Division, and it was decided that a comprehensive portfolio review meeting will be held by the end of this month.
The ADB team was apprised of the New Renewable Energy Policy, which will be placed before Pakistan’s Council of Common Interest (CCI) in its scheduled meeting by the end of the month. The team was briefed on various steps that have been undertaken to boost the efficiency of the system and campaign against power theft, the ministry’s statement said, adding that the government’s circular debt capping plan has reduced the debt’s growth from Rs39 billion a month to Rs12 billion. 
On Dec. 6, Liepach observed that Pakistan’s “is a longstanding chronic issue ailing the country’s power sector.”
“A comprehensive and realistic Circular Debt Reduction Plan, assisted by ADB in close coordination with other development partners, is the cornerstone of this subprogram. The plan aims to drastically cut the new flows of circular debt and provides policy directions on addressing accumulated circular debt,” he said.