Aramco's IPO Delay Brings Silver Lining for Saudi Stocks - Bloomberg

Aramco's IPO Delay Brings Silver Lining for Saudi Stocks - Bloomberg:

There’s a silver lining for Riyadh-traded stocks in the delay to Saudi Arabian Oil Co.’s massive initial public offering.

While putting the oil giant’s market debut on hold has reduced Saudi Arabia’s likely profile on emerging-market equity indexes when the kingdom joins them next year, the decision has also removed a threat to investments in other Saudi stocks from what was set to be the world’s largest IPO.

Listing Aramco would be “very positive long term, but at the time of the IPO, our biggest concern would be a drain of liquidity, because you would see a lot of investors selling off their shares in order to fund their applications for the IPO,” Fahd Iqbal, head of Middle East research at Credit Suisse Group AG, said in an interview with Bloomberg Television. “With the removal of that IPO for the time being, it removes a little bit of that overhang.”