Saudi Aramco IPO

Saudi Aramco’s listing is expected to overshadow every IPO in history, as it may be valued at a staggering $2 trillion. Find out more about this oil and gas conglomerate and learn how to trade its shares with IG.

Contact us on +971 (0) 4 5592108 or sales.ae@ig.com about opening an account. Our customer service team is available 24 hrs a day, except for Saturday from 02:00am to 12:00pm (Dubai time).

Contact us: +971 (0) 4 5592108

Saudi Aramco IPO

Saudi Aramco’s listing is expected to overshadow every IPO in history, as it may be valued at a staggering $2 trillion. Find out more about this oil and gas conglomerate and learn how to trade its CFD shares with IG.

Contact us on +971 (0) 4 5592108 or sales.ae@ig.com about opening an account. Our customer service team is available 24 hrs a day, except for Saturday from 02:00am to 12:00pm (Dubai time).

Contact us: +971 (0) 4 5592108

Why trade Saudi Aramco shares with IG after it lists?

Speculate on Saudi Aramco

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When is the Saudi Aramco IPO?

Saudi Aramco could go public in 2020, but there is no confirmed date for the IPO. Ex-energy minister Khalid Al-Falih hinted that the IPO may be pushed to 2021.

Plans for the IPO were announced in 2016 but Saudi Aramco, the world’s most profitable company, pushed back the date several times due to bookkeeping and corporate structure issues. Saudi Aramco’s senior VP of finance, Khalid Al-Dabbagh, confirmed that the company is ready for the IPO, but the timing will depend on shareholders’ perception of the market. The company is likely to list on the London Stock Exchange (LSE), where its bonds are listed, or the New York Stock Exchange (NYSE).

How to trade Saudi Aramco shares after it lists

You can speculate on Saudi Aramco's share price movements after the listing via a CFD trading account, giving you more opportunities to gain exposure to the oil and gas giant.

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What will the Saudi Aramco IPO value be?

There is no confirmed Saudi Aramco IPO value yet. It has been reported that Saudi Crown Prince Mohammed bin Salman is after a $2 trillion valuation, but the final figure will depend on the outlook for oil prices, as well as Saudi oil production and exports. Ultimately, one of the world’s investment banks will set the Saudi Aramco IPO value.

What could the Saudi Aramco share price be when it floats?

The Saudi Aramco share price will depend on the final valuation and the amount of shares the business will release to the public. The Saudi kingdom plans to sell a mere 5% of the company’s shares, with the majority remaining the property of the sovereign government. After the listing, the share price will fluctuate as supply and demand changes.

Why is Saudi Aramco going public?

Saudi Aramco was originally planning on going public to raise capital for the kingdom’s sovereign wealth fund, the Public Investment Fund (PIF), which it was expected to join. At the time, it was anticipated that the listing would push the fund’s value up to $3 trillion. However, the PIF no longer needs the cash injection so Saudi Aramco is now focusing on raising money for its own diversification and is no longer expected to be brought under the PIF’s umbrella.

What is the outlook for Saudi Aramco?

The outlook for Saudi Aramco is mixed, as a few factors should be taken into consideration when forecasting the future of the company. The short-term outlook is based mainly on its exposure to oil – therefore, the oil price. If there is an uptrend, Saudi Aramco should be pleased with the investment bank’s decision at the time of the IPO. However, fears of a recession in the US might have a negative impact on petroleum demand.

The long-term outlook will depend on the outcome of the IPO. The point of the listing is to diversify and move away from industry trends surrounding fossil fuels. If it can execute its plan, the outlook could be positive. It has already started its expansion by way of the recent acquisition of a 70% stake in Saudi petrochemicals giant SABIC.

How has Saudi Aramco been performing?

Saudi Aramco has been growing its revenue every year, while cutting production costs and reducing its carbon footprint. In 2017, net income was $75.9 billion, increasing to $110.1 billion in 2018. The half-year report for 2019 revealed net income of $46.9 billion. The company has managed to cut extraction costs of crude oil to just $7.50 a barrel and overheads are only $1.50 per barrel. Oil production in 2019 is expected to reach 12.5 million barrels a day.

Who are Saudi Aramco’s competitors?

Saudi Aramco’s competitors include Shell (£223 billion), BP (£102 billion), Chevron (£224 billion) and Exxon Mobil (£295 billion), but it trumps all these companies in terms of market cap and revenue. Surprisingly, Saudi Aramco was formed much later than its competitors, it has the least number of employees and it is the only conglomerate between the five that hasn’t listed.

Saudi Aramco management team

There are seven key executives on Saudi Aramco’s corporate management team

Amin H. Nasser President and chief executive officer
Nabeel A. Al Mansour Senior VP general counsel and corporate secretary
Mohammed Y. Al Qahtani Senior VP upstream
Abdulaziz M. Al-Judaimi Senior VP downstream
Ahmad A. Al-Sa’adi Senior VP technical services
Muhammad M. Al-Saggaf Senior VP operations and business services
Khalid H. Al-Dabbagh Senior VP Culture

Who are the Saudi Aramco IPO advisors?

Saudi Aramco has three independent IPO advisors and three global coordinators (underwriters). However, recent reports have stated that the structure might change before the IPO.

Evercore Independent advisor
Moelis & Co Independent advisor
Michael Klein Independent advisor
JPMorgan Underwriter
Morgan Stanley Underwriter
HSBC Holdings Underwriter

How do IPOs work?

IPOs – short for ‘initial public offerings’ – happen when a company decides to list its shares on an exchange. This means the public can then buy or trade the shares. IPOs can create a lot of public interest, especially if the company is doing well. To learn more about IPOs and how they work, watch this short video.

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FAQs

Could I profit from the Saudi Aramco IPO?

The short answer is yes, you could. You could trade in Saudi Aramco CFD shares after the listing. Trading the shares after the IPO will be profitable if your prediction of the share price movement is correct.

What is Saudi Aramco’s business model?

Saudi Aramco is the world’s biggest oil and gas company. Operations include the exploration, production, refining, distribution and marketing of oil and gas.

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1Based on revenue excluding FX (published half yearly financial statements, June 2019).

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