The ARAMCO IPO Stumbles Out The Door

The ARAMCO IPO Stumbles Out The Door

Finally after numerous delays, the potentially largest Initial Public Offering (IPO) of stock has finally become for fully state-owned ARAMCO in the Kingdom of Saudi Arabia (KSA).  MOst of the delays had involved an unwillingness by the Saudi royal family to publicize financial and other factual details about the company, although issuing an IPO for 5 percent of the company was a part of the Vision 2030 plan of Crown Prince Mohammed bin Salman (MbS).

As it is, for the time being the IPO is only available to Saudi nationals through the Riyadh stock exchange.  It is unclear how long or even if it will open up to foreigners.  Reportedly the Saudis are hoping for it to value  the company at $2 trillion, which would put it well ahead of Apple and Microsoft, both of which are around $1 trillion.  But some observers think this is overly optimistic on the part of the Saudis for a variety of reasons.

Along with that, the US has this past month for the first time since 1978 recorded a trade surplus in petroleum products.  This will continue to put  downward pressure on global oil prices, and also depress the prospects for how much money this IPO will raise in the end.

Barkley Rosser

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