Soon Aramco Will Have a Price - Bloomberg

Soon Aramco Will Have a Price - Bloomberg:

Fischer Black famously defined an efficient market as “one in which price is within a factor of 2 of value, i.e., the price is more than half of value and less than twice value,” and I certainly would not aspire to any greater precision. By that standard, the initial public offering of Saudi Aramco is going great:

• Saudi Aramco may be worth as little as $1.5 trillion or even less, well below the target set by the kingdom, according to research sent on Sunday to potential investors by the banks involved in the company’s initial public offering. 
  
• The research, according to multiple investors who reviewed it, suggests the banks are struggling to pinpoint a precise valuation for Aramco. Some banks offered a huge range -- as much as $1 trillion in the case of Bank of America -- between their low and high estimates. … 
• BofA put the valuation of Aramco at $1.22 trillion as a low case scenario and $2.27 trillion as a high case — a huge gap that’s more than enough to fit the combined market capitalizations of Exxon Mobil Corp., Royal Dutch Shell Plc and Chevron Corp, the world’s three largest publicly listed energy companies. ...

Fitch Warns on $23 Billion of #Dubai Inc. Debt Held by Banks - Bloomberg

Fitch Warns on $23 Billion of Dubai Inc. Debt Held by Banks - Bloomberg:

A “significant portion” of $23 billion in loans made to Dubai government-related companies maturing at the end of 2021 may need to be restructured -- again, according to Fitch Ratings Ltd.

Banks in the United Arab Emirates -- still suffering the fallout of Dubai’s 2010 property crisis -- are at risk once again due to falling home prices and non-performing loans, the ratings agency said in a report on Tuesday.

Oversupply, weaker consumer sentiment due to lower oil prices and a less supportive economic environment are all impacting prices, according to Fitch. Foreign buyers have also been deterred by the U.A.E. dirham appreciation and geopolitical tensions.

#Dubai Is Flouting the Biggest Taboo of an Economy Without Brakes - Bloomberg

Dubai Is Flouting the Biggest Taboo of an Economy Without Brakes - Bloomberg:

The desert gave Dubai an easy excuse to keep building.

Sprawling for miles in every direction from the dueling skyscrapers on the coast, villa communities have sprung up across the sandy interior, bringing with them schools, hospitals and shopping malls. Where the dunes once spilled into the Persian Gulf, an eight-lane highway now connects the new developments with the established neighborhoods.

But five years into Dubai’s property funk, the emirate’s leadership is drawing the line.

Work on a mega-airport, designed to be one of the world’s biggest, was put on hold. And in the most dramatic U-turn yet, Dubai’s ruler has created a committee, headed by his son, to balance out supply and demand in the property market and ensure that state-owned developers don’t crowd out private builders.

Oil rises on U.S.-China hopes and improved outlook - Reuters

Oil rises on U.S.-China hopes and improved outlook - Reuters:

Oil prices rose on Monday, buoyed by an improved outlook for crude demand as better-than-expected U.S. jobs growth added to market hopes a preliminary U.S.-China trade deal would be reached this month.

Brent crude futures for January LCOc1 settled at $62.13 a barrel, up 44 cents, or 0.7%. December U.S. crude futures CLc1 rose 34 cents, or 0.6%, to end at $56.54 a barrel.

Market optimism about progress in U.S.-China trade negotiations propelled U.S. stock indexes to record highs on Monday, elevating oil. Energy shares .SPNY gained the most of the 11 major S&P 500 sectors.

Chinese President Xi Jinping and U.S. President Donald Trump have been in continuous touch through “various means,” China said on Monday, when asked when and where the two leaders might meet to sign a trade deal.

Give or take a trillion: Investors still in the dark on #Saudi Aramco value - Reuters

Give or take a trillion: Investors still in the dark on Saudi Aramco value - Reuters:

Saudi Aramco’s blockbuster listing remained shrouded in mystery on Monday, a day after the company finally announced its plans, with scant details disclosed and expert valuations varying wildly from around $1.2 to $2.3 trillion.

The state oil giant, the world’s most profitable company, fired the starting gun on a domestic initial public offering (IPO) on Sunday after a series of false starts that had kept the investment world guessing.

However potential investors, rattled by a damaging attack on Aramco’s facilities in September, were not given key details usually included in “intention to float” notices - such as how much of the company will be sold, and when the sale will happen.

Now fund managers are poring over bank research about the famously secretive company, but little certainty has been provided even by analysts from the Wall Street giants with roles in the IPO, five investment and banking sources told Reuters.

MIDEAST STOCKS- #Saudi rebounds on banks; most of Gulf moves little | Nasdaq

MIDEAST STOCKS-Saudi rebounds on banks; most of Gulf moves little | Nasdaq:

Saudi Arabian shares rebounded on Monday, led by gains in banking shares and corporate earnings announcements, while other major Gulf bourses were little changed.

Saudi Arabia's benchmark index .TASI rose 0.8%, a day after it saw sharpest intraday fall since late August as Saudi Aramco disclosed its intention to list its shares on the domestic stock market.

National Commercial Bank 1180.SE increased 1.4% and Saudi British Bank 1060.SE advanced 3.2%.

Saudi Aramco IPO-ARMO.SE on Sunday announced its intention to float on the domestic stock market in what could be the world's biggest listing as the kingdom seeks to diversify its economy away from oil.

SoftBank: blind spots impair Masayoshi Son’s $100bn Vision | Financial Times

SoftBank: blind spots impair Masayoshi Son’s $100bn Vision | Financial Times:

As the global business elite deserted a Saudi Arabian investment summit a year ago, after the killing of journalist Jamal Khashoggi by Saudi agents, the founder of Japan’s SoftBank slipped into Riyadh for a discreet meeting.

Masayoshi Son and his chief lieutenant, Rajeev Misra, were there to see Mohammed bin Salman, the crown prince who had helped to make them the world’s most influential technology investors. Nearly half of SoftBank’s $97bn technology-focused Vision Fund — the biggest pool of private money ever raised — came from the young royal’s sovereign wealth fund. 

Their message for Prince Mohammed was clear: SoftBank, they said, would not abandon him, people briefed on the conversation told the Financial Times. The crown prince pledged never to forget their loyalty.

#Saudi Aramco sweetens IPO terms to win over investors | Financial Times

Saudi Aramco sweetens IPO terms to win over investors | Financial Times:

For nearly four years Saudi Arabia has been dangling the promise of offering investors a chance to buy into the world’s most profitable company. On Sunday, it made a significant step towards delivering as officials sought to put aside questions over Saudi Aramco’s valuation to formally announce the kingdom’s intention to list the state oil giant.

The launch of the initial public offering process for Saudi Aramco in Dhahran was marked by a hard sell to Saudis who might be keen to have a slice of a national champion as well as foreign investors who are more sceptical about how Riyadh values the state energy company.

Amin Nasser, Saudi Aramco’s chief executive, told reporters that an investment in the company was a unique opportunity. He emphasised the company’s access to some of the world’s most prolific oil reserves, low-cost barrels, as well as Saudi Aramco’s expansion plans into gas and chemicals. The company also lauded its low debt levels.

Aramco Share Sale Sees Saudis Save Up for Bet - Bloomberg

Aramco Share Sale Sees Saudis Save Up for Bet - Bloomberg:

It’s the day so many Saudis have eagerly awaited.

The sale of shares in their national oil giant, Aramco, has been three years in the making and fraught with delays. The buzz in Riyadh is now not if, but when people can own a piece of the most profitable company on the planet. Provided, of course, they have the money.

“We knew it was a matter of time, so all the talk in the office was everybody save up, have some cash ready to go,” said Nosaibah Alrajhi, 30, who founded and runs a financial services company. “I have some cash ready.”

#Saudi Stocks Disconnect From EM Peers as Aramco IPO Nears: Chart - Bloomberg

Saudi Stocks Disconnect From EM Peers as Aramco IPO Nears: Chart - Bloomberg:

Oil giant Saudi Aramco’s confirmation of plans to list locally is dragging on existing members of the country’s equity benchmark. The main Saudi equities index retreated more than 2% in the past two sessions, with some analysts and investors saying the offering -- potentially the largest share sale ever -- may suck liquidity from the rest of the bourse. The Tadawul All Share Index retreated 4.3% last month amid reports of developments in the IPO, while the MSCI Emerging Markets gauge advanced 4.1%, sending the 120-correlation between the two to the lowest level since August 2018.

#Saudi Aramco Delays Payment on Sabic Acquisition by Four Years - Bloomberg

Saudi Aramco Delays Payment on Sabic Acquisition by Four Years - Bloomberg:

Saudi Aramco will delay fully paying for the acquisition of a 70% stake in petrochemicals company Sabic by four years until September 2025 under terms of a new deal agreed on last month.

Aramco will also only pay the kingdom’s sovereign wealth fund about a third of the $69.1 billion price tag in cash, down from half previously, the oil firm said in its intention-to-float announcement on Sunday. The purchase of the Public Investment Fund’s stake in Saudi Basic Industries Corp., as the company is formally known, is set to close in the first half of 2020, the document shows.

Under the fresh pact, Aramco will also pay a total of $3 billion in additional costs to PIF in the form of loan charges and promissory notes. When the deal was first agreed on in March, Aramco was set to foot $1 billion in loan charges and promissory notes, according to its bond prospectus from April.

#AbuDhabi Plans to Start Futures Contract for Its Main Oil Grade - Bloomberg

Abu Dhabi Plans to Start Futures Contract for Its Main Oil Grade - Bloomberg:

Abu Dhabi will begin trading futures contracts of its flagship oil grade in what could eventually become a new price benchmark for a fifth of the world’s crude.

Trading in Murban crude futures aims at “strengthening Abu Dhabi’s position as a global energy player,” Crown Prince Mohammed Bin Zayed Al Nahyan said Monday in a Tweet. The emirate also reported significant increases in its oil and gas reserves.

Adnoc produces about 1.7 million barrels a day of Murban, its best and most abundant grade. It hopes the planned Murban contract will provide a benchmark for exports of crude from the Persian Gulf, which supplies about a fifth of the world’s oil. Most Middle Eastern producers price their crude based on the Oman and Dubai benchmarks.

UPDATE 1- #UAE planning to sell debut federal bonds in 2020 - Reuters

UPDATE 1-UAE planning to sell debut federal bonds in 2020 - Reuters:

The United Arab Emirates (UAE) is planning to sell federal bonds for the first time in 2020, a government official told news channel Al Arabiya on Monday.

The country last year issued a law permitting the federal government to begin issuing sovereign debt, which is usually sold by individual emirates.

The bonds would be “for the achievement of certain goals for the UAE, and the proceeds are not used to fund the budget, except in certain capital projects,” said Younis Haji al Khoori, undersecretary at the ministry of finance.

Oil slips as concerns over economic data offset trade deal optimism - Reuters

Oil slips as concerns over economic data offset trade deal optimism - Reuters:

Oil prices eased on Monday as traders took profit ahead of fresh European and U.S. economic data, despite hopes for some resolution to the U.S.-China trade row that has hurt global economic growth and crimped energy demand.

Prices jumped about $2 a barrel on Friday after the world’s top two economies said they had made progress on trade talks while U.S. officials said the deal could be signed this month.

Brent crude futures for January LCOc1 fell 16 cents to $61.53 a barrel by 0727 GMT, while December U.S. crude futures CLc1 was at $56.04 a barrel, down 16 cents.

“Friday’s mega-rally was built on a combination of not-as-bad-as-feared data and optimism on a trade deal that really, only keeps the lights on. It does not increase the brightness of the world economy,” Jeffrey Halley, a Singapore-based senior market analyst for Asia Pacific at OANDA, wrote in a note.

MIDEAST STOCKS- #Saudi shares gain as other Gulf markets fall - Reuters

MIDEAST STOCKS-Saudi shares gain as other Gulf markets fall - Reuters:

Saudi stocks rose in early trade on Monday, supported by gains in banking shares and corporate earnings, while other major Gulf markets moved lower.

Saudi Arabia’s benchmark index rose 0.2%. On Sunday, it posted its sharpest intraday fall since late August after oil giant Saudi Aramco (IPO-ARMO.SE) disclosed its intention to list shares.

Aramco on Sunday announced its intention to float on the domestic stock market in what could be the world’s biggest listing as the kingdom seeks to diversify its economy away from oil.

Banque Saudi Fransi advanced 1.2% and National Commercial Bank was up 0.5%.