DUBAI: Enough clues are emerging from the Saudi Aramco prospectus for the forthcoming initial public offering (IPO) to make an informed guess about what the price per share will be when the stock is finally priced on Dec. 4 ahead of Tadawul trading a few days later.
I must stress that I am not the recipient of any inside information in this respect, merely an observer of stock market dealings and IPOs going back to the 1980s — long before they became known as IPOs and were usually called “floats” or listings.” But my logic goes like this.
We know that there are 200 billion shares in Saudi Aramco in existence — that’s in the prospectus — and we know that about 0.5 percent of them will be targeted at private shareholders — Saudi nationals, resident expats who bank at the right place and GCC citizens — in the IPO.
So that means 1 billion shares, give or take a few maybe, will be offered to investors in the non-institutional tranche of the offering.
Of course, we don’t know yet what the total market capitalization of Aramco will be once the book-building process is completed. That will depend largely on demand among the big global institutions.
But the range of values produced by the banks advising on the IPO is huge — from a low of $1.2 trillion to a high of $2.3 trillion. It is unlikely the IPO would go ahead at below $1.5 trillion, and more than $2 trillion just seems exorbitant, even in the Kingdom’s wildest dreams.
So let’s assume a “Goldilocks” mid-way point of $1.75 trillion — not too hot for the international buyers, not too cold for the vendors.
That would equate to a price of $8.75 per share, meaning that the private shareholder tranche would be looking to raise $8.75 billion, or roughly $260 from each man, woman and child in the Kingdom’s population of 33.4 million.
That does not seem too excessive for the IPO of a lifetime.
The ‘Goldilocks’ level in the Aramco IPO — $8.75 a share
The ‘Goldilocks’ level in the Aramco IPO — $8.75 a share
- There are currently 200 bn shares in existence in Saudi Aramco
- 0.5 percent of the shares will be targeted at private shareholders
Saudi POS spending jumps 28% in final week of Jan: SAMA
RIYADH: Saudi Arabia’s point-of-sale spending climbed sharply in the final week of January, rising nearly 28 percent from the previous week as consumer outlays increased across almost all sectors.
POS transactions reached SR16 billion ($4.27 billion) in the week ending Jan. 31, up 27.8 percent week on week, according to the Saudi Central Bank. Transaction volumes rose 16.5 percent to 248.8 million, reflecting stronger retail and service activity.
Spending on jewelry saw the biggest uptick at 55.5 percent to SR613.69 million, followed by laundry services which saw a 44.4 percent increase to SR62.83 million.
Expenditure on personal care rose 29.1 percent, while outlays on books and stationery increased 5.1 percent. Hotel spending climbed 7.4 percent to SR377.1 million.
Further gains were recorded across other categories. Spending in pharmacies and medical supplies rose 33.4 percent to SR259.19 million, while medical services increased 13.7 percent to SR515.44 million.
Food and beverage spending surged 38.6 percent to SR2.6 billion, accounting for the largest share of total POS value. Restaurants and cafes followed with a 20.4 percent increase to SR1.81 billion. Apparel and clothing spending rose 35.4 percent to SR1.33 billion, representing the third-largest share during the week.
The Kingdom’s key urban centers mirrored the national surge. Riyadh, which accounted for the largest share of total POS spending, saw a 22 percent rise to SR5.44 billion from SR4.46 billion the previous week. The number of transactions in the capital reached 78.6 million, up 13.8 percent week on week.
In Jeddah, transaction values increased 23.7 percent to SR2.16 billion, while Dammam reported a 22.2 percent rise to SR783.06 million.
POS data, tracked weekly by SAMA, provides an indicator of consumer spending trends and the ongoing growth of digital payments in Saudi Arabia.
The data also highlights the expanding reach of POS infrastructure, extending beyond major retail hubs to smaller cities and service sectors, supporting broader digital inclusion initiatives.
The growth of digital payment technologies aligns with Saudi Arabia’s Vision 2030 objectives, promoting electronic transactions and contributing to the Kingdom’s broader digital economy.
