Corporate Financing Analysis - Saudi Aramco IPO Could Be Game-Changer In Economic Reform Drive - 08 MAY 2017


After a prolonged period of relatively anaemic deal levels, the impending Saudi Arabian IPO boom is edging ever closer with the Kingdom's push to diversify its economy away from oil set to be a major boost for the local arena for new listings over the next decade or more. Indeed, the government's 'Vision 2030' initiative, which is the Kingdom's blueprint for the transformation of the economy published in April 2016, together with the associated National Transformation Plan (NTP) which provides detailed targets of the Vision 2030 agenda, have primed Saudi Arabia for a significant privatisation push at a time when the Kingdom is keen to open-up to international investors.

This could potentially mean scores of new deals being put on the bloc by the state, with the IPO arena expected to play host to the majority of them, rather than spinning assets off to strategic acquirers, as this would be in keeping with moves to boost the global profile of the local TASI Tadawul All Share Index (TASI), the stock exchange which opened its doors to foreign investors in June 2015. While deals are expected to come from across a range of industry sectors, all the market chatter in the Saudi IPO market at preset is of the proposed listing of state-run oil firm Saudi Aramco, a company which is often described as 'the jewel in the Kingdom's crown', and which was recently given an eye-watering valuation of USD2trn by deputy crown prince Mohammad bin Salman Al Saud.

Already Trending Higher

A Kingdom Returning
Saudi Arabia - IPO Deal Value, By Deal Volume, y-t-d
Source: Zephyr, a Bureau van Dijk product, BMI

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