Saudi stocks lead gulf drop as Aramco IPO confirmed: Inside EM | Fin24
 
Loading...

Saudi stocks lead gulf drop as Aramco IPO confirmed: Inside EM

Oct 07 2018 16:32
Filipe Pacheco

Saudi Arabian equities retreated the most in the Middle East, even after Crown Prince Mohammed bin Salman said the kingdom’s plan to overhaul its oil-dependent economy is on track. All other major stock gauges in the region also fell.

The Tadawul All Share Index rose briefly before slipping more than 1%, led by a decline in Saudi Basic Industries Corporation. The gauge’s 120-day correlation with Brent crude, which fell for a second day on Friday, is the highest since July 2017.

The Saudi crown prince said in an interview that the stalled plan to sell shares in oil giant Aramco will go ahead, promising an initial public offering by 2021 and sticking to his ambitious view the state-run company is worth $2trn or more.

The crown prince, facing US pressure to tame surging oil prices, also said that the kingdom is fulfilling promises to make up for Iranian crude supplies lost to American sanctions.

“Investors would like to see more details regarding to what lead to the delay of Aramco’s IPO, to have a better understanding of what was the rationale behind the decision,” said Aarthi Chandrasekaran, vice president at Shuaa Capital in Dubai. “Economic concerns are still pressuring sentiment in general, and would be necessary to see more clarity on measures that could change that in the short term.”

MSCI Emerging Markets Index fell 4.5% last week, the biggest weekly drop since February, while a gauge of emerging-market currencies lost 0.8%.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Can the SABC avoid retrenching staff?

Previous results · Suggest a vote

Loading...