Investment experts give warm reception to Saudi Aramco's IPO

Saudi Aramco IPO causes excitement amongst the investor community as company prepares to float

by Patrick Sullivan, Political Editor on 30 October 2019 14:18

Saramco

Wealth managers and industry experts are enthusiastic about Saudi Aramco’s forthcoming Initial Public Offering (IPO), which is due to be launched on November 3rd with trading expected to start from December 11th. Saudi Aramco, the world’s most profitable company and largest oil producer globally, last year earned greater profits than Apple, JP Morgan Nestle and Airbus combined ($111 billion).

Aramco is looking to float a 1% to 2% stake on the kingdom’s Tadawul market, in what would be one of the largest ever public offerings, worth upwards of $20 billion. Saudi Aramco produces more than one in every 10 barrels of oil produced globally, which is more than double Exxon Mobil’s production, its closest competitor. The company also enjoys the lowest cost of production and is therefore able to generate more cash profit per barrel than any other oil company. Furthermore, Aramco’s total hydrocarbon reserves represent five times the combined reserves of the next five oil majors and imply a reserve life of 52 years.

Wael Al-Nahedh, CEO, Spearvest, the international wealth management firm, said, “The long-awaited confirmation of Saudi Aramco’s IPO date provides a huge opportunity for investors to buy shares in the world’s most profitable company. As well as being one of the largest ever public offerings, this announcement underlines the kingdom’s wider economic ambitions at a time of global political uncertainty.

“Sharp-eyed investors will recognise the huge potential on offer, getting a chance to own part of a company with substantial size and footprint globally. Aramco produces more than one in every 10 barrels of oil globally, which is more than double Exxon Mobil’s production, its closest competitor.

“We expect to see high interest because the company enjoys the lowest levels of cost of production and is therefore able to generate more cash profit per barrel than any other oil company. This combination of high margins and dominant scale is what makes Aramco such a unique strategic asset, and the world’s most valuable company. We expect this stock to hold a proud position within investor portfolios.”

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