Saudi Aramco's worth may be just $1.1 trillion
LONDON: Saudi Arabia's national oil company may be worth half the $2 trillion (£1.61 trillion) valuation suggested by the country's officials, according to a report by the Financial Times.
The Kingdom is due to list shares in Saudi Aramco in both Riyadh and at least one other foreign stock exchange by 2018, selling up to 5% of what will likely become the world's biggest company by market capitalisation.
The valuation of those shares has been the subject of intense debate. Deputy Crown Prince Mohammed bin Salman, who is in charge of the Saudi Arabia's economic policy, has said the IPO will value Aramco at $2 trillion or more, which is around two-thirds the size of the entire London Stock Exchange. But, ac cording to FT estimates using valuations from previous shares sales of British Petroleum and Brazil's Petrobras, the correct valuation should be no more than $1.1 trillion.
The analysis chimes in with views of investors and fund managers, ac cording to a survey by re gional investment bank EFG Hermes last month.
That study found that most investors see Aramco having a market capitalisation of $1 trillion to $1.5 trillion when it sells shares to the public.
The Kingdom is due to list shares in Saudi Aramco in both Riyadh and at least one other foreign stock exchange by 2018, selling up to 5% of what will likely become the world's biggest company by market capitalisation.
The valuation of those shares has been the subject of intense debate. Deputy Crown Prince Mohammed bin Salman, who is in charge of the Saudi Arabia's economic policy, has said the IPO will value Aramco at $2 trillion or more, which is around two-thirds the size of the entire London Stock Exchange. But, ac cording to FT estimates using valuations from previous shares sales of British Petroleum and Brazil's Petrobras, the correct valuation should be no more than $1.1 trillion.
The analysis chimes in with views of investors and fund managers, ac cording to a survey by re gional investment bank EFG Hermes last month.
That study found that most investors see Aramco having a market capitalisation of $1 trillion to $1.5 trillion when it sells shares to the public.
