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Saudi Aramco IPO Can the crown prince deliver?

The potential IPO of Aramco offers investors the chance of gaining exposure to an oil giant sitting on vast reserves. However, exposure to Aramco means exposure to the Saudi state, with which the company is tightly entwined. The IPO is the cornerstone of Saudi Crown Prince Mohammed bin Salman’s plan to ‘rewire’ the country, so a bet on Aramco is a bet on his ability to deliver McKinsey-inspired economic reforms in a country that faces many challenges. Conditions for a listing look near perfect, with stock markets close to record highs, the oil price at a cyclical high and the electric vehicle revolution perhaps hinting that peak demand could be close. The IPO has been delayed, but we argue that reflects a desire to find the right investors rather than the right price.

  • McKinsey report laid the foundations
  • Aramco is too big to value
  • Too many "ifs" and "buts"

Martin Jansson

Strategist

Commodities

nija03@handelsbanken.se

Latest analyses

2018-04-11

Saudi Aramco IPO

2018-03-23

Commodity Bulletin

2018-03-23

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  3. Pricing at 27bp over swap, matched maturity

Kiran Sakaria, Junior Strategist | kisa02@handelsbanken.se

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Claes Måhlén, Chief Strategist | clma02@handelsbanken.se

FI Comment — Swedbank Hypotek will introduce a new SEK covered bond

  1. Swedbank Hypotek will introduce 193; matures on December 20, 2023
  2. The coupon is 1%; ISIN SE0011089622
  3. Pricing at 27-28.5bp over swap, matched maturity

Kiran Sakaria, Junior Strategist | kisa02@handelsbanken.se

Saudi Aramco IPO — Can the crown prince deliver?

• McKinsey report laid the foundations
• Aramco is too big to value
• Too many "ifs" and "buts"

Martin Jansson, Strategist | nija03@handelsbanken.se