‘Source of pride’ as investors scramble for Saudi Aramco shares

Saudi Arabian and international investors have subscribed to the initial public offering of Saudi Aramco in huge numbers. (File/AFP)
Updated 29 November 2019

‘Source of pride’ as investors scramble for Saudi Aramco shares

  • Institutional orders in the IPO included 54% from Saudi cooperates, 24.1% from Saudi funds and 10.5% from non-Saudi investors
  • The subscription period for institutional investors remains open to Dec. 4

DUBAI: Saudi Arabian and international investors have subscribed to the initial public offering of Saudi Aramco in huge numbers, with demand for shares in the world’s most profitable company exceeding the number of shares on offer.
Financial advisers to the biggest IPO in history announced that bids to the value of $44.3bn (166.275bn riyals) have been received in total from institutional and private investors for the $25.6bn worth of shares on offer.
With the order books open to institutions until next Wednesday, that means the IPO will definitely be the biggest in financial history, and should, in theory, lead to a jump in the share price when trading starts on Tadawul the following week.
Institutional demand for the shares even bigger than from private individuals. Corporates in the Kingdom account for more than half (54 percent) of the bid value, with Saudi funds and investment institutions comprising another big chunk (24.1 percent).
Non-Saudi investors are looking for 10 percent of the offer - a comparatively big figure given the fact the IPO was not marketed outside the region.
Rania Nashar, deputy chairman of Samba Capital, one of the advisers, said the IPO was “a source of pride” for the Kingdom.
“It is an indication of success and a signal of confidence, further bolstering the reputation and prestige of a company that has unrivaled standing globally in the energy sector. This success corroborates the foresight and depth of the strategic decision behind this landmark moment not just in Aramco’s history, but also in the development of the Kingdom’s economy,” she added.
Sarah Al Suhaimi, chief executive officer of NCB Capital and chair of the Tadawul where Aramco will be listed, said: “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 Saudi Aramco’s compelling investment proposition.
“We are confident that this will be maintained throughout the remainder of the institutional book-building period. This institutional demand also speaks well of the depth and diversification of the Saudi capital markets and its investor base,” she added.


China's aviation regulator raised concerns with Boeing on 737 MAX design changes

Updated 12 December 2019

China's aviation regulator raised concerns with Boeing on 737 MAX design changes

  • China is reviewing the airworthiness of the plane
  • China was first country to ground plane in March

BEIJING: China’s aviation regulator raised “important concerns” with Boeing Co. on the reliability and security of design changes to the grounded 737 MAX, it said on Thursday, but declined to comment on when the plane might fly again in China.
China is reviewing the airworthiness of the plane based on proposed changes to software and flight control systems according to a bilateral agreement with the United States, Civil Aviation Administration of China (CAAC) spokesman Liu Luxu told reporters at a monthly briefing.
He reiterated that for the plane to resume flights in China, it needed to be re-certified, pilots needed comprehensive and effective training to restore confidence in the model and the causes of two crashes that killed 346 people needed to be investigated with effective measures put in place to prevent another one.
China was the first country to ground the 737 MAX after the second crash in Ethiopia in March and had set up a task force to review design changes to the aircraft that Boeing had submitted.
The US Federal Aviation Administration (FAA) will not allow the 737 MAX to resume flying before the end of 2019, its chief, Steve Dickson, said on Wednesday.
Once the FAA approves the reintroduction into service, the 737 MAX can operate in the United States, but individual regulators could keep the planes grounded in other countries until they complete their own reviews.
“Due to the trade war, the jury is still out on when China would reintroduce the aircraft,” said Rob Morris, Global Head of Consultancy at Ascend by Cirium.
Chinese airlines had 97 737 MAX jets in operation before the global grounding, the most of any country, according to Cirium Fleets Analyzer.