Saudi Arabia’s state-owned oil giant, Saudi Aramco, will start trading shares on the country’s stock exchange on 11 December this year, according to a report by news channel Al Arabiya and later by Reuters.
The television news channel and Reuters did not cite sources or if a foreign listing was still going ahead. Aramco told Yahoo Finance UK: “As a matter of policy, Saudi Aramco does not comment on rumour or speculation. The company continues to engage with the shareholders on IPO readiness activities. The company is ready and timing will depend on market conditions and be at a time of the shareholders choosing.”
The report says that Saudi Arabia’s Capital Markets Authority will announce the start of the initial public offering (IPO) process on Sunday, with subscription for shares to start on 4 December.
In 2016, Prince Mohammed bin Salman had said he had hoped to float about 5% of Aramco via a local and international listing, with a company valuation of at least $2 trillion (£1.5 trillion). There has been a race between mainly New York, London, and Hong Kong over who will snap up the $100bn slice of the pie because the deal was touted to generate $1bn in fees.
However, the IPO has posed some serious questions over transparency and realistic valuations and the company has failed to convince investors of the multi-trillion dollar valuation.
After initially wanting to launch an IPO in 2019, Aramco chief executive Amin Nasser said in January this year that Aramco would be ready to float by 2021.
It then made a rare financial disclosure in August to bolster renewed interest in a potential IPO from foreign investors. Its results showed a 12% slide in profit in its first half results statement but it still makes more money than any other company in the world.
The oil price has fallen to about $58 per barrel (CL=F; BZ=F), down from $69 to $66 per barrel in the same period in 2018. The energy titan says this is a key reason for why net income has dropped 4%, to $46.9bn.
Later that month, it was reported that Brexit and political protests in Hong Kong eliminated London and Hong Kong from the race for a foreign listing.