Surprise! Aramco Scraps International Listing Plans

Sometimes you gotta face reality because reality is, well, in your face. Now what? They don't really think they'll get $200 billion from a Tadawul listing, do they?

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HA!

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Saudi Aramco, I'm so over you. 

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They will get their $200 bn from a Tadawul-listing .... this will be a cornerstone in implementing the masterplan for the Saudi Future and they will rally the Saudi Middle Class band major businesses behind this issue as investors. The shortfall in investments will be balanced by the various KSA Funds ....

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Tadawul is not big enough for a total 5% stake in Aramco. It would represent such a huge part of Tadawul, which would be risky for Tadawul and for The Kingdom. The total Tadawul market cap is $440 billion-ish. You can't have a single company represent a quarter of the total exchange.

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I'm less worried about that then I am a possibly proxy war with Iran which almost seems imminent.

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2 minutes ago, HermitMunster said:

I'm less worried about that then I am a possibly proxy war with Iran which almost seems imminent.

and which would be delicious for oil prices. 

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The price increase of the past few days is quite mysterious. Since price rigging and collusion among producers is illegal in al Western countries, against World Trade Organisation, and GATT - it is no surprise that Aramco is having difficulty becoming listed on a well renowned exchange. I don't see any fundamental to support this last spike in prices, the stockpiles are full and the world economy is quite nervous on the demand side (tariffs and sanctions against Russia). So the spike in oil must be exactly the kind of price fixing that the world economy does not need. 

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3 minutes ago, Vogel DK said:

The price increase of the past few days is quite mysterious. Since price rigging and collusion among producers is illegal in al Western countries, against World Trade Organisation, and GATT - it is no surprise that Aramco is having difficulty becoming listed on a well renowned exchange. I don't see any fundamental to support this last spike in prices, the stockpiles are full and the world economy is quite nervous on the demand side (tariffs and sanctions against Russia). So the spike in oil must be exactly the kind of price fixing that the world economy does not need. 

Price increases probably supported by Saudi Arabia/Iranian tensions and with OPEC's latest jawboning about how there is still more work to do in an attempt to assure the market they are not going to give up just yet. A lot of the price swings are from sentiment. 

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15 hours ago, HermitMunster said:

I'm less worried about that then I am a possibly proxy war with Iran which almost seems imminent.

You can say that again. I do hope, though, that someone would advise MBS on the dangers of an all-out war, since he is apparently incapable of learning lessons such as Yemen.

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(edited)

But the proxy war has been going on for years now, first in Lebanon, Syria and then in Yemen. Seems that Iran actually has a more diversified economy and is less dependent on an urealistically high and manipulated oil-price. If only Iran would stop being such a terror menace in the region, and join the western world, so much prosperity and happiness would result. I don't see what Iran has to gain by being against the west.

 

Edited by Vogel DK
Omission
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Iran is trying to reform. It will always be mistrustful of the West for obvious historical reasons but as far as I can see it, right now it is trying to change, to move away from its isolation and fundamentalism. It doesn't have to join the Western world because it is not part of it and never will be, ditto the whole Middle East. but that's not the point. The point is that Saudi Arabia cannot bear the thought of not being the biggest and strongest boy in class. Not to mention Israel: the internal Muslim conflicts suit its interests just fine. 

By the way, what terror menace? Islamic State is a brainchild of Riyadh, not Tehran, if we're talking menaces. Hamas? They seem to have calmed down quite a bit compared with 30 years ago. The Houthis? They don't seem bent on global domination. As menaces go, Saudi A has a lot more to answer for than Iran.

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Hi Marina, you have some very good and interesting ideas. I always thought Persian culture was more aligned with western culture, than the arab world. But with Russia aligning itself with Saudi Arabia to press the price of oil up, it becomes very complicated. Since I have a bearish interest in lower oil prices, I am hoping that the Iranian stance will succeed. Perhaps too, there could be a renaissance for European cultural and business collaboration with Iran, as we have so many common interests. The iranian revolution really messed things up I believe.

F. Vogel from Copenhagen, Denmark

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I wonder what will happen much further down the road when the Saudis start becoming more prominent in renewables as opposed to oil? 

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Unfortunately, it is common in this country to speak of Iran as if it is Ayatollah Khamenei and the religious right.  Half of the country, at least, is relatively pro-West, which is probably more than the citizens of Saudi Arabia.  Remember who supports the Wahhabi schools and whose citizens composed the 9/11 attack squad.  Iranians in general are far more educated and liberal in their political and social attitudes.  Moreover, President Rouhani and his followers would like to turn the country more in that direction.  The big problem they have is the hard line from our government which plays into the hands of their religious right wing.  It looks like Trump is about to make that even worse for the moderates.  We should be doing just the opposite.  

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The Aramco IPO was dead in the water the moment MBS began his soft putsch for power. Pulling back the curtain on what is essentially the Kingdom's only meaningful asset was far too risky from a political perspective. However, without the inflow of fresh capital that the IPO would have brought, the likelihood that The Kingdom resorts to more extreme financial measures should the price of oil roll over again, has increased significantly. The trump card being floating the riyal. Imagine the regional fallout from that move!

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that's the million-dollar question right now: are they going to de-peg??? because if they do, no one will see it coming. 

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8 minutes ago, TraderTate said:

that's the million-dollar question right now: are they going to de-peg??? because if they do, no one will see it coming. 

Haha! No one except us. It's actually a reasonable expectation to have if oil rolls over again, cartel members begin to cheat, and US shale continues to gobble up market share. 

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but the entire GCC would have to depeg then

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1 hour ago, TraderTate said:

but the entire GCC would have to depeg then

That would be the expected response. However, it would be a fantastic opportunity for SA to push for full monetary integration within the GCC and the creation of a common currency. If the anyone in the Kingdom has been watching the success that Germany has had in bringing almost all of Europe under its defacto control with the creation of the Euro and the ECB, then they must be very eager to extend that same sort of power over their fellow Gulf states. What's the saying? Never let a good crisis go to waste? 

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2 hours ago, TraderTate said:

I'm going to have to invest in a neck brace after the whiplash. I honestly can't decide (but you know me, a bit of a conspiracy theorist) if this move was a stroke of genius or signs that there are some in the Kingdom unwilling to toe the line. On one hand, it seems a disorganized--and perhaps disloyal--move for someone to leak to the press that the IPO will not happen other than on Tadawul. Or... it was a clever way to manage expectations: Rumors surface that the IPO would be delayed into 2019. People in uproar. People not assuaged by the Kingdom's insistence that 2018 had been an arbitrary target all along. Leaks that it won't happen at all. People are like, oh no! Kingdom swoops in and says, oh, yeah, foreign IPO is still on. Now everyone will be satisfied with 2019 because at least it's still on, while they now have time to figure out how to pull a $2 trillion evaluation out of their hat.

 

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On 3/21/2018 at 5:02 AM, Vogel DK said:

But the proxy war has been going on for years now, first in Lebanon, Syria and then in Yemen. Seems that Iran actually has a more diversified economy and is less dependent on an urealistically high and manipulated oil-price. If only Iran would stop being such a terror menace in the region, and join the western world, so much prosperity and happiness would result. I don't see what Iran has to gain by being against the west.

 

 

Iran isn't against the West. The U.S. has been f----- with them since 1953, which, surprise surprise, was all about Iran wanting to nationalize their oil. 

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On 3/21/2018 at 7:07 AM, Vogel DK said:

Hi Marina, you have some very good and interesting ideas. I always thought Persian culture was more aligned with western culture, than the arab world. But with Russia aligning itself with Saudi Arabia to press the price of oil up, it becomes very complicated. Since I have a bearish interest in lower oil prices, I am hoping that the Iranian stance will succeed. Perhaps too, there could be a renaissance for European cultural and business collaboration with Iran, as we have so many common interests. The iranian revolution really messed things up I believe.

F. Vogel from Copenhagen, Denmark

Russia is not aligning itself with Saudi Arabia. 

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