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Saudi Aramco IPO

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Mon 18 Nov 2019, 17:02:25

The Saudi Aramco IPO is running into more trouble. Not only did they fail to list the IPO on a major western exchange as they proposed JUST AS I PREDICTED HERE ON THE PAGES OF PEAKOIL.COM FOR THE LAST SEVERAL YEARS, but they have just cancelled the "roadshow" they were going to present in New York and London to entice western institutional investors to invest in the IPO which has now been relegated to the teeny tiny Saudi Arabian stock exchange.


apparently you can't be bothered to read anything. The prospectus lays out precisely why Aramco is not out there looking for a secondary listing.....they are precluded from that for a period of one year. As well they will have their 2 thirds that goes to investment banks and institutions already fully subscribed (mainly by the banks who built the book) and the remaining 1/3 is reserved for private investors who hold Saudi Arabia citizenship. There is zero reasons for them to be flogging the current IPO on the Taduwal and they are precluded from trying to drum up interest in either a subsequent IPO or sale of shares for 1 year. It's all there in black and white in the prospectus.

Perhaps you could take some time to read it? Mind you based on the complete nonsense you have posted on this thread I doubt you would understand any of it. :roll:
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Tue 19 Nov 2019, 16:52:11

Three reasons why the Saudi Aramco IPO is already a failure ----its already missed the three main goals it had for this IPO

saudi-aramco-flotation-is-a-failure-before-it-has-even-begun

1. Prince Muhammad spent years touting the value of the IPO as north of 2 trillion dollars, but now the Saudis have been forced to reduce the value of the Saudi Aramco IPO significantly. The latest estimate has it down to 1.7-1.6 Trillion

2. A second goal of the IPO was to gain significant international investment in Saudi Aramco......but international interest has been tepid at best. Saudi Aramco has cancelled traveling roadshows sent to Asia, Europe and North America to promote the IPO, and now is targeting local Saudi billionaires and retail investors. The Saudi bank is even offering special loans to Saudis to enable them to buy stock in Saudi Aramco.

3. A third goal of the Saudi Aramco IPO was to get the company listed on a major international stock exchange in New York or London or a similar prestigious bourse in the west. I quote from the link above: "The third original ambition .... was to get Aramco listed on a foreign stock exchange as well as the local Tadawul market. That is why, for example, London’s financial dignitaries made a beeline to Riyadh and why the Financial Conduct Authority, embarrassingly, rewrote its listing rules to accommodate state-controlled behemoths in its “premium” category. But the IPO was redesigned as a Tadawul-only affair a while back and there is no timetable for when, if ever, a secondary listing on a foreign exchange will be pursued."

And, of course, this third point is key to the problems they are having now that they have settled for listing only on the local Saudi stock exchange. Saudi Aramco's inability to get their IPO listed on a western stock exchange makes the IPO much less appealing to international investors because investors see there is a lack of transparency in an offering done only on a teeny tiny stock exchange in Saudi Arabia that is very close to the royal family which also controls Saudi Aramco. The fact that the IPO is only listed in Saudi Arabia in turn reduces overall international interest in the IPO, and the lack of demand from international investors results in turn in the huge drop in value for Saudi Aramco.

All of this is turning out just as I predicted. I know people are supposed to say they take little joy when their dire predictions turn out to be true, but this is giving me considerable joy because the argument over this IPO stretched over several years. Its rare that one achieves complete victory over an opponent who was so nasty and therefore so much deserved to lose, but that is the situation here. Again and again I predicted that Saudi Aramco would not be able to list on a western exchange, and so it has come to pass. And the secondary ramifications from my prediction.....well, according to the article I link to above, those are all coming true as well, just as I predicted. Verily, I am happy to say that I am now proven correct and the victor in my central argument on this thread!!!

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Tue 19 Nov 2019, 20:11:34

but now the Saudis have been forced to reduce the value of the Saudi Aramco IPO significantly. 


This is relatively immaterial given what will determine the market cap of the company is the share price investors are willing to pay once the shares are freely trading on the Tadawul.

A second goal of the IPO was to gain significant international investment in Saudi Aramco......but international interest has been tepid at best. Saudi Aramco has canceled traveling roadshows sent to Asia, Europe and North America to promote the IPO, and now is targeting local Saudi billionaires and retail investors. The Saudi bank is even offering special loans to Saudis to enable them to buy stock in Saudi Aramco.


It was never stated that a goal was to gain “significant international investment” for the initial IPO on the Tadawul. As it stands 30% of the shares are offered to individual investors who are Saudi citizens….this was done to assuage the fears that many of the royal family had regarding de-Sauditizing their reserves completely. The other 1% will easily be taken up by the group of international banks that formed the IPO book (they are guaranteed a percent) and large investment banks/firms within Saudi Arabia. At this point in time, they have no need to seek large foreign investment. Given Aramco has stated time and again that their goal is 5% sale eventually, that leaves 3.5% that can be sold at some point through several international listings which they have said they are still considering.

A third goal of the Saudi Aramco IPO was to get the company listed on a major international stock exchange in New York or London or a similar prestigious bourse in the west.


Did they say anywhere that they are not going to eventually list on a foreign exchange? Did you see that statement anywhere from Aramco or the government? On the contrary, they said just last week that they are still considering when the appropriate time is to list on London, Japan, Singapore etc. All along the Saudis have stated their sale of shares would be done in parts with the first listing in Saudi Arabia, they haven’t changed that tune from day one.

Saudi Aramco's inability to get their IPO listed on a western stock exchange makes the IPO much less appealing to international investors because investors see there is a lack of transparency in an offering done only on a teeny tiny stock exchange in Saudi Arabia that is very close to the royal family which also controls Saudi Aramco. 


You are full of it. They didn’t actually issue a prospectus anywhere outside of the Tadawul so there was not “an inability to get their IPO listed on a western stock exchange” ….they didn’t attempt that yet so they couldn’t have somehow failed at it. As to transparency, I ask you once again to read the prospectus…..there is absolutely every last bit of transparency that you would see anywhere else. In other words, you are just making crap up which unfortunately seems to be your modus operandi. International investment banks are worried about several things (oil price, security issues and how much upside there will be to the stock price). Investment banks want the most bang for the buck, they will invest in large companies that have a guaranteed dividend that will likely grow (such as Aramco) but they also want the sizzle with the steak which is an ever-increasing share price. If they think the company is well valued at the time of IPO there is less chance of them seeing any immediate upside given the current float is low. That drives their investment decision more than most things. Listing a small percentage on the Tadawul initially should work well for Aramco in the future given it will raise capital and will allow international investment banks to better understand the company prior to lising on one of the main exchanges.

All of this is turning out just as I predicted. 


Give it a break, please…on the very first page you claimed the IPO had been canceled completely. You continued down that line of reasoning (with zero proof) for some time. Then you continued to demonstrate a complete lack of understanding regarding disclosure issues, IPO procedures, etc.at the same time as berating others about their apparent lack of understanding (based on your own incorrect viewpoints). Yet somehow you want to be proud of all the stupidity you have demonstrated?

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Thu 21 Nov 2019, 19:43:42

Here is an interesting take on how international companies might be able to make a bit of profit on the Tadawul Aramco IPO. Was in Forbes this week

There is already, and will continue to be, excitement for the IPO in Saudi Arabia. Moreover, in the absolute monarchy, wealthy families and big businesses are being pressured by the government and will need to comply. The retail investors are being incentivized to hold their shares for at least 6 months, and the wealthy and big businesses will be concerned about selling too soon and attracting the ire of the monarchy.

There is a good chance there will be particularly low volume in the hours, days, weeks and even months following the IPO. Not enough Saudis will be selling. The king and the crown prince do not want this IPO to be a failure, so they will push for the price to rise, perhaps even using government or PIF funds. Politically, for the monarchy, the rise of the share price—at least early on—must be inevitable.
With low volume, domestic excitement and authoritarian pressure, there could be an opportunity for foreign funds to buy in and then sell before the domestic Saudi population is able to. But those foreign funds would have to sell before the six-month lock up period is over. After that, the government will be free to sell more shares, which it has said it intends to do. Also, after six months, Saudi retail investors will have received the incentives for holding their positions, and some will begin to sell.
Of course, this is just one potential scenario. There is no way to know for sure if the centralized control the Saudi monarchy hopes to exert over this IPO will work and send Aramco’s share price rising in the first few months of trading. But it is what the Saudi monarchy wants.


the corollary to this as well is if Aramco can drive the share price up via the lock mechanism then there will be less incentive for current Saudi shareholders to sell and that has the added benefit of setting a higher price for sale of further shares in another market such as Japan or Singapore. Great strategy but no guaranty it will work.
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Fri 22 Nov 2019, 19:24:05

There was a very interesting article in "Oilprice.com" today entitled is the Aramco IPO the "ULTIMATE PUMP AND DUMP"

Is-The-Aramco-IPO-The-Ultimate-Pump-And-Dump

Their answer....YES. The article concludes that the ARAMCO IPO, which started with such great promise has turned into your basic "pump and dump" stock sale. In the absence of much foreign interest in the IPO, the IPO is now mainly being pushed onto buyers in Saudi. The stock sale is being done with a "lock-up" period of six months, so six months out there is risk of the Saudi buyers "dumping their shares" and causing a precipitous drop in the stock price.

And why aren't foreign buyers showing much interest? Here's a quote from the article (linked above):

The fact that the shares will only be listed on the Tadawul exchange and that the dividend Aramco promises its future investors will only be paid in Saudi rials don’t sound particularly tempting for investors who would rather trade on a bigger exchange and receive their dividends in a more popular currency.

This is, of course, the issue I've been posting about on this thread for three years now. As I predicted, the Saudis were unable to do what it took to get the Saudi Aramco IPO listed on a major western exchange and that failure is now causing real problems for them.

I think I'll take another victory dance based on this complete and total corroboration of my oft-stated viewpoint in the recent report by "OIlprice.com" Its very very very pleasant to have held to what was obviously the correct view for several years and then be proven totally correct. Its like vindication. Its like justice. It just feels so good. Ahhhhhhh. Sooo Goooood,

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Fri 22 Nov 2019, 20:30:13

This is, of course, the issue I've been posting about on this thread for three years now. As I predicted, the Saudis were unable to do what it took to get the Saudi Aramco IPO listed on a major western exchange and that failure is now causing real problems for them.


Good God, read my post immediately above (which you never do) which quotes from the article that the OilPrice journalist sourced.
YOu are a very basic idiot I'm afraid. When did Aramco try to do an IPO on any western exchange? Please show us their issued prospectus or the actual application they made. They didn't, they talked about it but decided instead to stick with the first step as described from the start....list on the Tadawul.

How exactly is this causing "real problems for them" please enlighten us. First of all you made up a bunch of stuff that wasn't said in the Oilprice article
eg:
Their answer....YES. The article concludes that the ARAMCO IPO, which started with such great promise has turned into your basic "pump and dump" stock sale.

If Aramco was so concerned about driving sales of their share outside of Saudi Arabia they would have marketed the IPO in those markets....they didn't which is pretty telling to anybody who isn't basically brain dead.

they never say that anywhere in the article. You are completely full of it. They simply lay out the option I mentioned above as to how a foreign investor could turn a quick profit. It is pretty clear that any investment bank putting money into Aramco is not looking at that but rather at the dividend which will almost certainly be increased. It is a solid dividend from a company with significant assets so somewhat bombproof with some geopolitical risk.

As to the reason foreign buyers haven't shown much interest.....they haven't had a chance to have they? The shares are being marketed only to Saudi foreign nationals and Saudi investment banks. The only international investment banks that have access to any shares are the ones who were involved in building the book. The Riyal trades on internal monetary markets, the exchange rate is not fixed so getting paid in riyals is not any more cumbersome nor more difficult than say selling shares on the LSE in pounds. If you want to take payment in dollars you investment broker simply converts when the dividend payment is made or you could keep that money in a riyal account if you so wished. Pretty basic stuff.

While you are doing you fake victory lap perhaps you should think about how you claimed that the IPO was completely canceled (not once but several times), and proceeded to come up with all sorts of nonsense regarding prospectus issuance, disclosure, reserves and pretty much everything else demonstrating you had your head completely inserted where the sun doesn't shine with regards to the whole issue.

Please go awary and give us all a break from your ridiculous claims. The price will be set in 2 weeks time and in short order the shares will begin trading. From there the market will decide ultimate valuation and demand and Aramco will make a decision on where they list the remaining 3.5% of the original 5% they intended to sell. It is that simple.
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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Sun 24 Nov 2019, 16:48:59

The Aramco IPO on the Tadawul is moving ahead fairly successfully so far:

Saudi Aramco IPO's institutional tranche oversubscribed
The institutional tranche of Saudi Aramco's initial public offering (IPO) has been oversubscribed while the retail portion has received a little more than 10 billion riyals ($2.67 billion) in orders so far, a banking source told Reuters


https://economictimes.indiatimes.com/markets/ipos/fpos/saudi-aramco-ipos-institutional-tranche-oversubscribed/articleshow/72172679.cms

That is in keeping with the reason why Aramco did not go on a roadshow seeing International investment, they didn't need to.

https://www.arabnews.com/node/1588956/business-economy

One of the most senior bankers working on the initial public offering of Saudi Aramco told Arab News that the decision to go ahead without international marketing was a rational one in light of unusually strong regional demand for the share sale.
Sultan Moussa, vice president of investment at NCB Capital, said: “It was not an irrational decision. Good sentiments and reasoning came before they made the decision. They did their homework very well before they reached that decision. Given the expressed valuation range reached and the expected demand, it was enough for them to go ahead without international marketing.”
Moussa was speaking in light of criticism from some western bankers of the decision to call off “roadshows” to foreign financial centers like New York and London and concentrate on domestic and regional demand for the record-breaking Aramco IPO
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Mon 25 Nov 2019, 22:45:18

Kingdom of Saudi Arabia starts a new crack down on journalists and businessmen who have been critical of the regime

saudi-arabia-arrests-more-opponents-despite-sensitivity-amid-ipo-push-

Prince Muhammad stopped the internal repression of dissidents for a while after the Khashoogi murder, but recently he has started arrested perceived political opponents of the regime again. Curiously, he is doing this just as the Saudi Aramco IPO is moving towards market. You'd think he would want Saudi Arabia to look good to the international community as they consider investing in Saudi Aramco......but apparently not.

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Mon 25 Nov 2019, 22:53:56

You'd think he would want Saudi Arabia to look good to the international community as they consider investing in Saudi Aramco......but apparently not.


didn't read my post again did you? They aren't concerned about international investment at this time as they have a fully committed offering internally.

The Saudis are going to do what they do, it's not called a Kingdom for no reason. The Royal families in this part of the world have a famous history going back as far as anyone can remember of violence, torture etc. I think anybody who invests there understands this.
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Re: Saudi Aramco IPO

Unread postby kublikhan » Thu 05 Dec 2019, 20:31:31

Saudi Aramco Raises $25.6 Billion in World’s Biggest IPO
*Oil giant to overtake Microsoft, Apple as biggest listed firm
*Aramco share offering was more than 4.6 times oversubscribed

Saudi Aramco raised $25.6 billion from the world’s biggest initial public offering, closing a deal that became synonymous with the kingdom’s controversial crown prince and his plans to reshape the nation. The state-owned oil giant set the final price of its shares at 32 riyals ($8.53), valuing the world’s most profitable company at $1.7 trillion. It received total bids of $119 billion. Aramco will become the world’s most valuable publicly traded company once it starts trading, overtaking Microsoft Corp. and Apple Inc.

The deal opens up one of the world’s most secretive companies, whose profits helped bankroll the kingdom and its ruling family for decades, to investors and Saudi individuals. Until this year, Aramco had never published financial statements or borrowed in international debt markets. It will also mean the company now has shareholders other than the Saudi government for the first time since it was nationalized in the late 1970s.
Saudi Aramco Raises $25.6 Billion in World’s Biggest IPO
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Re: Saudi Aramco IPO

Unread postby Plantagenet » Fri 06 Dec 2019, 02:42:24

The Saudi Aramco IPO has gone to market. As I predicted, the shares priced substantially below what Prince Muhammad had hoped for resulting in a significant shortfall in the amount of cash raised by the IPO. The reason? The IPO failed to obtain a listing on a major western stock market and was relegated to the podunk local stock market in Saudi Arabia.

aramco-worlds-biggest-ipo

"The total amount raised -whether $26 or $29BN with the greenshoe - will be a huge disappointment to Prince Mohammed, who for the last four years pushed to raise $100 billion by selling 5% of the group in a global financial capital such as London or New York. In the end he had to satisfy himself with a quarter of this amount sold on a domestic market. "

In order to sell the shares, the Saudis also had to go to extraordinary lengths, including loaning money to Saudi citizens so they could buy shares, putting pressure on Saudi oligarchs to buy shares, and promising a special dividend to Saudi IPO buyers.

Now that the IPO has gone public, it will be interesting to see what kind of quarterly reporting requirements the Saudi stock exchange will put on Saudi Aramco. Personally, I'm curious to see what the oil production from Ghawar does going forward, as according to one report oil production there had fallen significantly below prior levels.

Oh....and I'm going to do another victory dance now, since I predicted that the Aramco IPO would never meet the requirements to be listed on a major western stock exchange....and today settles the matter once and for all.

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Fri 06 Dec 2019, 12:17:19

The Saudi Aramco IPO has gone to market. As I predicted, the shares priced substantially below what Prince Muhammad had hoped for resulting in a significant shortfall in the amount of cash raised by the IPO. The reason? The IPO failed to obtain a listing on a major western stock market and was relegated to the podunk local stock market in Saudi Arabia.


Horseshit. It wasn’t even marketed anywhere but in the Middle East. The number of shares offered were fully subscribed meaning they had zero problem selling shares. What caused the slightly lower than hoped for valuation? A combination of low oil prices that have not increased as was once projected and the increased sense of risk associated with regional tensions. But at $1.7 trillion Aramco is the most valuable company in the world and the amount raised by only selling 1.5% of the company represents the largest successful IPO in history. Yeah, that is a real failure. :roll:
Not sure why you want to keep up with playing the fool here other than you seem to like that type casting.

"The total amount raised -whether $26 or $29BN with the greenshoe - will be a huge disappointment to Prince Mohammed, who for the last four years pushed to raise $100 billion by selling 5% of the group in a global financial capital such as London or New York. In the end he had to satisfy himself with a quarter of this amount sold on a domestic market. "


That could be the stupidest comment yet. The initial IPO was planned for 1 -2% and ended up being 1.5%, 1% to regional financial banks and .5% to Saudi Nationals that still leaves 3.5% that can be listed on one of the major exchanges elsewhere in the world. Have the Saudis said they wouldn’t do that? NO. In fact, they have been saying for the past couple of months that they are still looking at a future listing somewhere whether it be in Asia or London. But then you don’t bother to read anything that disagrees with your ridiculous understanding of the process.

Its not magic! I just get things right on a fairly consistent basis!


Let see you claimed that the IPO had been totally cancelled and it wasn’t
You claimed that the Saudis were afraid of disclosure and they went ahead with the most complete disclosure you could possibly imagine related to the Bond sale and the local IPO
You made all sorts of completely stupid claims regarding requirements for an IPO and disclosure, all of which are easily refuted by simply looking up the published requirements
You now claim that Aramco failed to do an IPO on international exchanges and in fact they have not even attempted that (i.e no filings anywhere whether it be in the US, UK, Singapore, Japan etc)

Need I continue? :roll:

I guess ol Gary Larson ran into similar folks to inspire this classic

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Re: Saudi Aramco IPO

Unread postby rockdoc123 » Thu 12 Dec 2019, 11:39:07

Saudi Aramco hits $2 trillion market cap on second day of trading

The figure, nearly $1 trillion higher than the world’s next-largest public companies Microsoft and Apple, was long ridiculed by much of the international financial community.
Share rose 10% to 38.7 riyals apiece ($10.32) but slipped back to 37 riyals within minutes of the market open.


https://www.cnbc.com/2019/12/12/saudi-aramco-hits-2-trillion-market-cap-on-second-day-of-trading.html

This is quite significant as it sets the valuation if and when Aramco issues the remaining 3.5% of the remaining shares from the 5% they had originally proposed as being eventually sold. Of course, it is only the second day of trading and the stock can always get hit with the normal IPO slingshot effect but I think this situation is a bit different than other IPOs. The 0.5% shares held by the public cannot be sold for 1 year and much of the institutional ownership of the 1.0% is by major investment banks in countries friendly (and somewhat beholding) to Saudi Arabia. My guess is that as a result, you will see a lot less profit selling early on, but we shall see.
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