Funds Expect Saudi Aramco To Be Valued Around $1-1.5 Trillion
DUBAI, March 6 (Reuters) - Fund managers and institutional investors expect oil giant Saudi Aramco to have a market capitalisation of $1 trillion to $1.5 trillion when it sells shares to the public next year, a survey by regional investment bank EFG Hermes showed on Monday.
The valuation of Aramco
Deputy Crown Prince Mohammed bin Salman, who oversees the kingdom's economic policy, has said the sale is expected to value Aramco at $2 trillion or more, making it by the far the world's largest initial public offer.
The EFG Hermes survey, conducted at an investment conference organised by the bank in Dubai, found 39 percent of respondents predicted the market would value Aramco at between $1 trillion and $1.5 trillion.
Thirty-six percent expect a valuation below $1 trillion, and 24 percent a figure above $1.5 trillion, the bank said.
EFG Hermes said it polled 510 international fund managers and investors from 260 institutions at the conference, as well as 147 other companies. It did not say how many of them had replied to the question on Aramco.
The company's ultimate valuation will depend on decisions that are expected to be made by Saudi authorities in coming months, including the tax rate that Aramco will pay as a public company, and the portion of Aramco's huge and diverse array of assets that is included in the listed entity.
Saudi officials have given no concrete indication of how they will decide these questions, so any estimate of Aramco's value remains tentative.
The EFG Hermes survey suggests a higher valuation than some estimates by private analysts. Last year Foreign Reports, a Washington-based oil industry consultancy, calculated Aramco could have a market value of $250-460 billion, excluding the value of refining assets and guaranteed access to oil and gas.
Aramco's valuation is important for Saudi Arabia because it will determine how much money the government makes from the IPO and the size of foreign fund flows that are expected to enter the country to buy the shares.
The huge IPO looks likely to strengthen the case for Saudi Arabia to join the emerging markets indexes of international index compilers such as MSCI, a step which could attract tens of billions of dollars of fresh foreign money to the kingdom.
The EFG Hermes survey found 16 percent of respondents expected Saudi Arabia to join MSCI's emerging markets index next year, 34 percent in 2019, 22 percent in 2020 and 27 percent at a later date.
(Editing by Louise Heavens)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- How Likely Is an All-Out War in the Middle East Involving the USA?
- Rooftop Solar Now 4th Largest Source of Electricity in Australia
- US Confirms Reimposition of Oil Sanctions against Venezuela
- EU, Industry Players Ink Charter to Meet Solar Energy Targets
- Analyst Says USA Influence on Middle East Seems to be Fading
- Russian Ships to Remain Banned from US Ports
- Brazil Court Reinstates Petrobras Chair to Divided Board
- EIB Lends $425.7 Million for Thuringia's Grid Upgrades
- Var Energi Confirms Oil Discovery in Ringhorne
- Seatrium, Shell Strengthen Floating Production Systems Collaboration
- An Already Bad Situation in the Red Sea Just Got Worse
- What's Next for Oil? Analysts Weigh In After Iran's Attack
- USA Regional Banks Dramatically Step Up Loans to Oil and Gas
- EIA Raises WTI Oil Price Forecasts
- How Likely Is an All-Out War in the Middle East Involving the USA?
- Venezuela Authorities Arrest Two Senior Energy Officials
- Namibia Expects FID on Potential Major Oil Discovery by Yearend
- Oil Markets Were Already Positioned for Iran Attack
- Is The Iran Nuclear Deal Revival Project Dead?
- Petrobras Chairman Suspended
- Oil and Gas Executives Predict WTI Oil Price
- An Already Bad Situation in the Red Sea Just Got Worse
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Oil and Gas Execs Reveal Where They See Henry Hub Price Heading
- Equinor Makes Discovery in North Sea
- Macquarie Strategists Warn of Large Oil Price Correction
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- Standard Chartered Reiterates $94 Brent Call
- Chevron, Hess Confident Embattled Merger Will Close Mid-2024
- Analysts Flag 'Remarkable Feature' of 2024 Oil Price Rally