Prince Gets His $2 Trillion Aramco, But Victory Comes at a Cost - Bloomberg:
Almost four years after Mohammed bin Salman first said Saudi Arabia’s state oil giant was worth $2 trillion, the crown prince finally proved his point on Thursday.
On the second day of trading on Riyadh’s stock exchange, Saudi Aramco surged -- briefly -- past his target. The valuation had become a matter of pride for Prince Mohammed, and he’s likely to claim victory over skeptical international investors who said the fair value for the world’s largest company is far lower.
“I know he is proud,” his half-brother and oil minister, Prince Abdulaziz bin Salman, said in a TV interview after the shares were successfully allocated last week. “He made us all proud because he took good decisions. These decisions, you have seen it now, have brought us a 4.6 times over-subscription.”
When the international sales effort was ditched back in November, the crown prince, advised by Prince Abdulaziz and Aramco Chairman Yasir Al-Rumayyan, decided to press on without the global fund management industry and use local capital to get as close to $2 trillion as possible.
Thursday, 12 December 2019
Aramco Is Said to Pay Banks Only $64 Million for Record IPO - Bloomberg
Aramco Is Said to Pay Banks Only $64 Million for Record IPO - Bloomberg:
Saudi Aramco is poised to pay a combined $64 million to the banks that arranged the world’s largest initial public offering, a letdown for the Wall Street firms that pitched aggressively for a spot on the deal, people with knowledge of the matter said.
The Gulf oil giant plans to pay the top local banks on the deal -- known as joint global coordinators -- 39 million riyals ($10.4 million) apiece, according to the people. The top foreign banks on the deal are set to each get 13 million riyals, or the equivalent of $3.5 million, the people said, asking not to be identified because the information is private.
The figures represent the base fee being paid by Aramco, which will decide the amount of discretionary incentive fees at a later date, the people said. If Aramco opts to dole out additional money, most of it would likely go to the domestic banks that brought in the bulk of the IPO orders.
Aramco raised $25.6 billion in its share sale, which became a local affair after foreign fund managers shunned its premium valuation. The base fee, representing 0.25% of the funds raised, pales in comparison to other large deals.
Saudi Aramco is poised to pay a combined $64 million to the banks that arranged the world’s largest initial public offering, a letdown for the Wall Street firms that pitched aggressively for a spot on the deal, people with knowledge of the matter said.
The Gulf oil giant plans to pay the top local banks on the deal -- known as joint global coordinators -- 39 million riyals ($10.4 million) apiece, according to the people. The top foreign banks on the deal are set to each get 13 million riyals, or the equivalent of $3.5 million, the people said, asking not to be identified because the information is private.
The figures represent the base fee being paid by Aramco, which will decide the amount of discretionary incentive fees at a later date, the people said. If Aramco opts to dole out additional money, most of it would likely go to the domestic banks that brought in the bulk of the IPO orders.
Aramco raised $25.6 billion in its share sale, which became a local affair after foreign fund managers shunned its premium valuation. The base fee, representing 0.25% of the funds raised, pales in comparison to other large deals.
Moody’s Declares ‘Deposit Default’ for Three Top Lebanese Banks - Bloomberg
Moody’s Declares ‘Deposit Default’ for Three Top Lebanese Banks - Bloomberg:
Moody’s Investors Service said emergency measures by Lebanon’s central bank to address foreign-currency shortages forced three of the country’s top lenders into a “deposit default.”
Bank Audi, Blom Bank and Byblos Bank also had their baseline credit assessments, or BCAs, downgraded to the second lowest level in what Moody’s said wasn’t a credit rating action. It describes BCAs as an opinion on “issuers’ standalone intrinsic strength,” absent any extraordinary support from outside.
“The downgrade is driven by the payment of part of the interest for foreign currency deposits in local currency by banks in Lebanon following instructions by the country’s central bank, which constitutes a deposit default based on the rating agency’s own definitions,” the company said in a statement.
Staring down the worst financial crisis the country has faced in decades, the central bank last week told lenders to pay half of foreign-currency deposits in Lebanese pounds. It plans to do the same on what it owes banks for dollar-denominated deposits and certificates of deposits.
Moody’s Investors Service said emergency measures by Lebanon’s central bank to address foreign-currency shortages forced three of the country’s top lenders into a “deposit default.”
Bank Audi, Blom Bank and Byblos Bank also had their baseline credit assessments, or BCAs, downgraded to the second lowest level in what Moody’s said wasn’t a credit rating action. It describes BCAs as an opinion on “issuers’ standalone intrinsic strength,” absent any extraordinary support from outside.
“The downgrade is driven by the payment of part of the interest for foreign currency deposits in local currency by banks in Lebanon following instructions by the country’s central bank, which constitutes a deposit default based on the rating agency’s own definitions,” the company said in a statement.
Staring down the worst financial crisis the country has faced in decades, the central bank last week told lenders to pay half of foreign-currency deposits in Lebanese pounds. It plans to do the same on what it owes banks for dollar-denominated deposits and certificates of deposits.
MIDEAST STOCKS-Aramco advances for second day; #Saudi sharply lower - Reuters
MIDEAST STOCKS-Aramco advances for second day; Saudi sharply lower - Reuters:
Most major Gulf markets fell on Thursday
with Saudi leading the declines as it gave up previous session's
gains made as oil giant Aramco commenced trading on the bourse.
State-owned Aramco, however, climbed further to be
up 4.6%, the top gainer, adding to a 10% rise on its first day
of trade. The stock closed at 36.8 riyals, valuing the firm
slightly below $2 trillion.
Total turnover for the whole Riyadh market was 18.4 billion
riyals with Aramco contributing 15.8 billion riyals ($4.2
billion) of that with 417.9 million shares exchanging hands,
Refinitiv data showed.
Support was largely from Saudi and Gulf investors.
Most major Gulf markets fell on Thursday
with Saudi leading the declines as it gave up previous session's
gains made as oil giant Aramco commenced trading on the bourse.
State-owned Aramco, however, climbed further to be
up 4.6%, the top gainer, adding to a 10% rise on its first day
of trade. The stock closed at 36.8 riyals, valuing the firm
slightly below $2 trillion.
Total turnover for the whole Riyadh market was 18.4 billion
riyals with Aramco contributing 15.8 billion riyals ($4.2
billion) of that with 417.9 million shares exchanging hands,
Refinitiv data showed.
Support was largely from Saudi and Gulf investors.
Aramco shares closing price on Thursday put value slightly below $2 trillion - Reuters
Aramco shares closing price on Thursday put value slightly below $2 trillion - Reuters:
Saudi Aramco’s (2222.SE) shares closed at 36.8 Saudi riyals on Thursday, putting the company’s market value slightly below $2 trillion.
The share price at market open earlier on Thursday had been 38.7 riyals, lifting market value above the $2 trillion price tag long sought by Saudi Crown Price Mohammed bin Salman, Refinitiv data showed.
Saudi Aramco’s (2222.SE) shares closed at 36.8 Saudi riyals on Thursday, putting the company’s market value slightly below $2 trillion.
The share price at market open earlier on Thursday had been 38.7 riyals, lifting market value above the $2 trillion price tag long sought by Saudi Crown Price Mohammed bin Salman, Refinitiv data showed.
UPDATE 1-Wizz Air seeks Middle East growth with new #AbuDhabi airline - Reuters
UPDATE 1-Wizz Air seeks Middle East growth with new Abu Dhabi airline - Reuters:
Wizz Air said on Thursday it planned to launch Wizz Air Abu Dhabi next year in its first expansion beyond Europe, as the low-cost airline seeks to grow by offering its budget prices on Middle East routes.
Budapest-based Wizz Air, one of the largest low-cost airlines in Central and Eastern Europe, said its new carrier aims to offer flights from Europe to the Middle East.
Wizz CEO Jozsef Varadi the new airline would be a major source of growth in the future, bringing tourists from its markets in Europe and Russia to Abu Dhabi and in the longer term, flying between the Middle East, the Indian subcontinent and Africa.
“The intention and the purpose of coming to Abu Dhabi is to stimulate the market place. Abu Dhabi is hugely underpenetrated with regard to low-cost flying,” Varadi said in an interview.
Wizz Air said on Thursday it planned to launch Wizz Air Abu Dhabi next year in its first expansion beyond Europe, as the low-cost airline seeks to grow by offering its budget prices on Middle East routes.
Budapest-based Wizz Air, one of the largest low-cost airlines in Central and Eastern Europe, said its new carrier aims to offer flights from Europe to the Middle East.
Wizz CEO Jozsef Varadi the new airline would be a major source of growth in the future, bringing tourists from its markets in Europe and Russia to Abu Dhabi and in the longer term, flying between the Middle East, the Indian subcontinent and Africa.
“The intention and the purpose of coming to Abu Dhabi is to stimulate the market place. Abu Dhabi is hugely underpenetrated with regard to low-cost flying,” Varadi said in an interview.
Oil rises 1% on optimism for a U.S.-China trade deal - Reuters
Oil rises 1% on optimism for a U.S.-China trade deal - Reuters:
Oil prices gained nearly 1% on Thursday on hopes that the United States and China were close to reaching a deal on an ongoing trade dispute that has raised concerns about global demand for crude.
Brent crude LCOc1 futures rose 48 cents to settle at $64.20 a barrel. West Texas Intermediate (WTI) crude CLc1 futures rose 42 cents to settle at $59.18 a barrel.
Trump tweeted on Thursday that the United States was very close to a big deal with China amid reports that the country was considering a delay or possible cancellation of tariffs scheduled to go into effect on Dec. 15.
While prices received a fresh boost immediately following the tweet, futures eased somewhat during the session.
Oil prices gained nearly 1% on Thursday on hopes that the United States and China were close to reaching a deal on an ongoing trade dispute that has raised concerns about global demand for crude.
Brent crude LCOc1 futures rose 48 cents to settle at $64.20 a barrel. West Texas Intermediate (WTI) crude CLc1 futures rose 42 cents to settle at $59.18 a barrel.
Trump tweeted on Thursday that the United States was very close to a big deal with China amid reports that the country was considering a delay or possible cancellation of tariffs scheduled to go into effect on Dec. 15.
While prices received a fresh boost immediately following the tweet, futures eased somewhat during the session.
COLUMN-Oil consumption tracking is all about Asia: Kemp - Reuters
COLUMN-Oil consumption tracking is all about Asia: Kemp - Reuters:
Oil market analysts must make sense of a bewildering array of statistics about production, consumption and inventories, compiled and published with varying definitions and degrees of accuracy and timeliness.
The challenge is to form an accurate and nuanced picture of the whole market capable of generating useful forecasts, without becoming lost in the insignificant details.
The World Bank identifies around 200 economies in the world, but on the consumption side, at least, only a handful are individually important for market analysis.
The oil market is best thought of as a complex adaptive system (“Persistence of instability in the oil market”, Reuters, Sept. 15, 2016).
Oil market analysts must make sense of a bewildering array of statistics about production, consumption and inventories, compiled and published with varying definitions and degrees of accuracy and timeliness.
The challenge is to form an accurate and nuanced picture of the whole market capable of generating useful forecasts, without becoming lost in the insignificant details.
The World Bank identifies around 200 economies in the world, but on the consumption side, at least, only a handful are individually important for market analysis.
The oil market is best thought of as a complex adaptive system (“Persistence of instability in the oil market”, Reuters, Sept. 15, 2016).
#Saudi Aramco to Rise more says Jaap Meijer, managing director of equity research at Arqaam Capital - Bloomberg
Saudi Aramco to Rise more says Jaap Meijer, managing director of equity research at Arqaam Capital - Bloomberg:
Jaap Meijer, managing director of equity research at Arqaam Capital Ltd. in Dubai, talks about the prospects for Saudi Aramco. Its shares surged Wednesday after the oil producer’s initial public offering, valuing the company at a record $1.88 trillion in the culmination of a four-year effort by the kingdom to list its crown jewel. Meijer speaks with Manus Cranny and Tracy Alloway on "Bloomberg Daybreak: Middle East." (Source: Bloomberg)
Jaap Meijer, managing director of equity research at Arqaam Capital Ltd. in Dubai, talks about the prospects for Saudi Aramco. Its shares surged Wednesday after the oil producer’s initial public offering, valuing the company at a record $1.88 trillion in the culmination of a four-year effort by the kingdom to list its crown jewel. Meijer speaks with Manus Cranny and Tracy Alloway on "Bloomberg Daybreak: Middle East." (Source: Bloomberg)
Baladna, Rameda IPO in Middle East Today Beyond Aramco - Bloomberg
Baladna, Rameda IPO in Middle East Today Beyond Aramco - Bloomberg:
As the eyes of the world were on the blockbuster market debut of Saudi Aramco, two much smaller Middle East stock listings snuck in underneath the radars of many investors.
Dairy producer Baladna fell 1% in Doha after raising $390 million in an offer that was restricted to locals, erasing gains at the open of as much as 5.9%. And in Cairo, a pharmaceutical company known as Rameda lost as much as 13% after raising about $109 million.
The stocks’ debuts indicate that listing activity is picking up in the Middle East after what has been a quiet year. The most recent listing in Saudi Arabia for a company bigger than $100 million was in June, while no IPOs happened in the United Arab Emirates this year.
As the eyes of the world were on the blockbuster market debut of Saudi Aramco, two much smaller Middle East stock listings snuck in underneath the radars of many investors.
Dairy producer Baladna fell 1% in Doha after raising $390 million in an offer that was restricted to locals, erasing gains at the open of as much as 5.9%. And in Cairo, a pharmaceutical company known as Rameda lost as much as 13% after raising about $109 million.
The stocks’ debuts indicate that listing activity is picking up in the Middle East after what has been a quiet year. The most recent listing in Saudi Arabia for a company bigger than $100 million was in June, while no IPOs happened in the United Arab Emirates this year.
#Saudi Aramco Investors Should Cash Out Now, Bernstein Says - Bloomberg
Saudi Aramco Investors Should Cash Out Now, Bernstein Says - Bloomberg:
Saudi Aramco investors should take profit now after shares in the world’s biggest company jumped 10% in their first day of trading Wednesday, analysts at Sanford C. Bernstein & Co. recommended in a note to clients.
A low dividend yield, the political risk of the government still running the company, and a bleak outlook for oil prices all point to a fair valuation for Saudi Aramco that’s about 28% lower than the $1.88 trillion it reached after its first day of trading in Riyadh, Bernstein analysts including Neil Beveridge and Oswald Clint said in the Thursday note.
There may still be some short term upside because of index inclusion and the difficulty of shorting stocks on the Saudi Tadawul Stock Exchange, Bernstein said. The company jumped a second day on Thursday, pushing the oil giant beyond the $2 trillion valuation that Crown Prince Mohammed bin Salman set as a target more than three years ago.
Saudi Aramco investors should take profit now after shares in the world’s biggest company jumped 10% in their first day of trading Wednesday, analysts at Sanford C. Bernstein & Co. recommended in a note to clients.
A low dividend yield, the political risk of the government still running the company, and a bleak outlook for oil prices all point to a fair valuation for Saudi Aramco that’s about 28% lower than the $1.88 trillion it reached after its first day of trading in Riyadh, Bernstein analysts including Neil Beveridge and Oswald Clint said in the Thursday note.
There may still be some short term upside because of index inclusion and the difficulty of shorting stocks on the Saudi Tadawul Stock Exchange, Bernstein said. The company jumped a second day on Thursday, pushing the oil giant beyond the $2 trillion valuation that Crown Prince Mohammed bin Salman set as a target more than three years ago.
Investors, take note: Top five #UAE investment opportunities for 2020 | ZAWYA MENA Edition
Investors, take note: Top five UAE investment opportunities for 2020 | ZAWYA MENA Edition:
In a wide-ranging interview Anita Yadav, CEO of Century Financial, picks the investment opportunities available in the UAE.
What would be the top 5 investment opportunities for investors in UAE for 2020?
Right now in the UAE there is no single asset class that really stands out, but there’s no asset class that is to be avoided either. Everything has its pluses and minuses and within those asset classes you can pick and choose the winners.
Although returns on the Dubai Financial Market and the Abu Dhabi Securities Exchange have been less than stellar this year, I would say there is a strong case for being invested in equities. Among the listed stocks I find value in some of the upcoming newer sectors, say for example, delivery companies, or companies with credible track record like Air Arabia, Aramex, Emirates NBD or DEWA.
In a wide-ranging interview Anita Yadav, CEO of Century Financial, picks the investment opportunities available in the UAE.
What would be the top 5 investment opportunities for investors in UAE for 2020?
Right now in the UAE there is no single asset class that really stands out, but there’s no asset class that is to be avoided either. Everything has its pluses and minuses and within those asset classes you can pick and choose the winners.
Although returns on the Dubai Financial Market and the Abu Dhabi Securities Exchange have been less than stellar this year, I would say there is a strong case for being invested in equities. Among the listed stocks I find value in some of the upcoming newer sectors, say for example, delivery companies, or companies with credible track record like Air Arabia, Aramex, Emirates NBD or DEWA.
Oil prices rise on OPEC deficit forecast - Reuters
Oil prices rise on OPEC deficit forecast - Reuters:
Oil prices rose on Thursday, recouping some of the losses from the previous session that followed a surprise increase in U.S. crude inventories, as the market mood switched to relief after OPEC forecast a supply deficit next year.
Brent futures LCOc1 rose 28 cents, or 0.4% to $64.00 a barrel, after skidding 1% on Wednesday on the U.S. stocks build-up.
West Texas Intermediate crude CLc1 was up 12 cents, or 0.2%, at $58.88 a barrel, following a 0.8% drop the previous session.
The Organization of the Petroleum Exporting Countries (OPEC) on Wednesday said it now expected a small deficit in the oil market in the next year, suggesting the market is tighter than previously thought - even before the latest pact with other producers to curb supply takes effect.
Oil prices rose on Thursday, recouping some of the losses from the previous session that followed a surprise increase in U.S. crude inventories, as the market mood switched to relief after OPEC forecast a supply deficit next year.
Brent futures LCOc1 rose 28 cents, or 0.4% to $64.00 a barrel, after skidding 1% on Wednesday on the U.S. stocks build-up.
West Texas Intermediate crude CLc1 was up 12 cents, or 0.2%, at $58.88 a barrel, following a 0.8% drop the previous session.
The Organization of the Petroleum Exporting Countries (OPEC) on Wednesday said it now expected a small deficit in the oil market in the next year, suggesting the market is tighter than previously thought - even before the latest pact with other producers to curb supply takes effect.
Oil market oversupply set to stay despite OPEC+ pact: IEA - Reuters
Oil market oversupply set to stay despite OPEC+ pact: IEA - Reuters:
Global oil inventories could rise sharply despite an agreement by OPEC and its allies to deepen output cuts as well as lower expected production by the U.S. and other non-OPEC countries, the International Energy Agency (IEA) said on Thursday.
“Despite the additional curbs ... and a reduction in our forecast of 2020 non-OPEC supply growth to 2.1 million barrels per day (bpd), global oil inventories could build by 700,000 bpd in Q1 2020,” the Paris-based IEA said in a monthly report.
The Organization of the Petroleum Exporting Countries, led de facto by Saudi Arabia, and other producers including Russia agreed last week to rein in output by an extra 500,000 bpd in the first quarter of 2020 in order to balance the market and buoy prices, but stopped short of pledging action beyond March.
Global oil inventories could rise sharply despite an agreement by OPEC and its allies to deepen output cuts as well as lower expected production by the U.S. and other non-OPEC countries, the International Energy Agency (IEA) said on Thursday.
“Despite the additional curbs ... and a reduction in our forecast of 2020 non-OPEC supply growth to 2.1 million barrels per day (bpd), global oil inventories could build by 700,000 bpd in Q1 2020,” the Paris-based IEA said in a monthly report.
The Organization of the Petroleum Exporting Countries, led de facto by Saudi Arabia, and other producers including Russia agreed last week to rein in output by an extra 500,000 bpd in the first quarter of 2020 in order to balance the market and buoy prices, but stopped short of pledging action beyond March.
#Saudi Aramco tops Crown Prince's $2 trillion goal as shares surge - Reuters
Saudi Aramco tops Crown Prince's $2 trillion goal as shares surge - Reuters:
Saudi Aramco (2222.SE) topped the $2 trillion target sought by Saudi leader Crown Prince Mohammed bin Salman on Thursday as its shares clocked up a second day of gains, defying some scepticism about the state-owned oil firm’s long-term value.
The Saudi Crown Prince has made Aramco’s initial public offering (IPO) the centerpiece of his vision of diversifying the Kingdom’s economy away from its dependence on oil by using the $25.6 billion raised to develop other sectors.
But that is well below his plan in 2016 to raise as much as $100 billion via a blockbuster international and domestic IPO.
Riyadh scaled back its plans after overseas investors baulked at the proposed valuation and only 1.5% of Saudi Arabian Oil Co (Aramco) shares were listed on the Riyadh stock exchange on Wednesday, a tiny free float for such a large company.
Saudi Aramco (2222.SE) topped the $2 trillion target sought by Saudi leader Crown Prince Mohammed bin Salman on Thursday as its shares clocked up a second day of gains, defying some scepticism about the state-owned oil firm’s long-term value.
The Saudi Crown Prince has made Aramco’s initial public offering (IPO) the centerpiece of his vision of diversifying the Kingdom’s economy away from its dependence on oil by using the $25.6 billion raised to develop other sectors.
But that is well below his plan in 2016 to raise as much as $100 billion via a blockbuster international and domestic IPO.
Riyadh scaled back its plans after overseas investors baulked at the proposed valuation and only 1.5% of Saudi Arabian Oil Co (Aramco) shares were listed on the Riyadh stock exchange on Wednesday, a tiny free float for such a large company.
Mideast Stocks: #Saudi drops a day after Aramco's debut, other Gulf markets quiet | ZAWYA MENA Edition
Mideast Stocks: Saudi drops a day after Aramco's debut, other Gulf markets quiet | ZAWYA MENA Edition:
Saudi Arabia's stock market fell on Thursday, reversing most of the previous session's gains made as state-owned oil giant Aramco debuted on the exchange, while other major Gulf markets were also little changed.
Aramco, however, jumped 8.1%, adding to a 10% rise on Wednesday. Its shares had been as much as 10% higher at 38.7 riyals at Thursday's market open, implying a market value of $2 trillion, Refinitiv data showed.
Aramco raised $25.6 billion on Dec. 5 through its IPO and plans to exercise a 15% greenshoe option in whole or part during the first 30 days of trading. If the option is exercised in full, the total raised from the IPO would amount to $29.4 billion.
The firm is expected to be included in the MSCI emerging markets index on Dec. 17.
Saudi Arabia's stock market fell on Thursday, reversing most of the previous session's gains made as state-owned oil giant Aramco debuted on the exchange, while other major Gulf markets were also little changed.
Aramco, however, jumped 8.1%, adding to a 10% rise on Wednesday. Its shares had been as much as 10% higher at 38.7 riyals at Thursday's market open, implying a market value of $2 trillion, Refinitiv data showed.
Aramco raised $25.6 billion on Dec. 5 through its IPO and plans to exercise a 15% greenshoe option in whole or part during the first 30 days of trading. If the option is exercised in full, the total raised from the IPO would amount to $29.4 billion.
The firm is expected to be included in the MSCI emerging markets index on Dec. 17.
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