Saudi Aramco IPO leaves few unscathed: Fuel for Thought

Saudi Aramco’s proposed initial public offering is in danger of turning into an embarrassment for all concerned, and the kingdom only has itself to blame. Last week’s denial that the IPO of the world’s largest oil company had effectively been cancelled was the latest in a long list of rebuttals officials have been forced to roll out. Repeated delays in the listing process — initially planned to go ahead this year — and confusion over how to achieve a desired $2 trillion valuation have sent out all the wrong signals to prospective international investors about Saudi Arabia’s reliability. Crown Prince Mohammed bin Salman cannot entirely escape carrying some of the responsibility for the repeated delays to the proposed sell-off, which he announced with a great fanfare two years ago, shortly before he replaced his cousin as heir to the Saudi throne. In principle, listing a minority stake in Aramco on a foreign exchange to raise $100 billion to be re-invested by the kingdom’s sovereign wealth fund made perfect sense, but this strategy has increasingly been criticized. What once seemed to some an encouraging sign of new visionary leadership from the 30-something princeling to reform the oil-rich kingdom’s economy now looks… continue reading

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