Riyadh – Mubasher: Subscription of individuals and entities in the Saudi Arabian Oil Company’s (Saudi Aramco) intimal public offering (IPO) began on Sunday on 1.5% of the company’s share, with a price range set between SAR 30 and SAR 32 ($8-8.5).
The IPO has been limited to investors in Saudi Arabia and the Gulf Cooperation Council (GCC) member countries.
Sources told Mubasher that the IPO is focused on investors in the Kingdom, alongside the participation of international entities through Qualified Foreign Investors (QFIs), with around 1,500 QFIs in Saudi Arabia eligible to participate in the IPO.
The QFI program was introduced in June 2015 and has been amended as recently as January 2018 to ease registration requirements and expand the range of eligible institutional investors, according to the Saudi Stock Exchange (Tadawul).
Eligibility extends to residents in Saudi Arabia with a bank account in one of the receiving entities or the IPO managers, namely: Al Rajhi Bank, Alawwal Bank, Alinma Bank, Arab National Bank (ABC), Bank Albilad, Bank Aljazira, Banque Saudi Fransi, Gulf International Bank, National Commercial Bank (NCB), Riyad Bank, Samba Financial Group, Saudi British Bank (SABB) and Saudi Investment Bank. However, this does not apply to residents and expatriates in GCC countries
Amendments to the IPO guidelines excluded foreign financial institutions from directly participating in the order book, as well as removing the article that allowed marketing the IPO in the US.
Commenting on the IPO, which is expected to be the largest in the world, financial analyst Qassim Al Ali said that the SAR 30-32 price range came below previous forecasts of SAR 37.5, noting that the reasonable pricing, expected returns of 4.37% to 4.6%, and having only 1% of shares offered for funds, are among the factors that shall support the success of the IPO.