The initial public offering was expected to be the largest ever and anticipation has been high. But it has been revealed, after months of speculation, that Crown Prince Mohammed bin Salman has made the decision that it isn’t the right time to float the company.
He has, however, indicated that he intends to, according to Reuters, underpin an ambitious plan for the Saudi Economy, which he wants to make less reliant on oil for revenue. That said, it is thought that the postponement may be linked to a rise in oil prices to above US$70 a barrel, somewhat relieving the pressure on the Saudi economy.
Energy stocks nudge FTSE upwards
Elsewhere on the FTSE, energy stocks have helped to lift the benchmark index to 7582.75, up 8.57 (0.11%) as of BST 14.05, following a rise in crude oil prices. BP’s share price has risen by 0.72 percent to 558.60 in a comparable rise to rival Royal Dutch Shell which is currently standing at 2592.00, up 0.95 per cent, both correct as of BST 14.08
Previous IPO delays
Back in March, Khalid Al-Falih, Aramco chairman and Saudi energy minister, delayed the IPO until the second quarter of 2019 from it’s original planned listing in the second half of 2018. According to Reuters, Aramco has now disbanded it’s financial advisors to focus on a proposal to acquire a stake in Saudi Based Industries Corp 2010 SE.
Estimated value downplayed by analysts
It is thought that the Saudis were hoping to achieve a valuation of somewhere in the region of GBP2 trillion but with some outside analysts valuing it lower than expected, some as much as half that amount according to CNBC, this could be a decision based on a number of factors and looks set to be continued.