Saudi Aramco IPO between 1,6 -1,7 trillion dollars

The Saudi Aramco IPO moved forward on Sunday with the information that the company valuation would be between 1,6 – 17, trillion dollars. According to the news, Aramco is selling 1,5 % of its shares in this IPO with the price range on 30 – 32 riyals per share.

The oil company is expected to raise new capital between 24 – 25,6 billion dollars and would then be the world biggest IPO ever.  This could beat the Chinese e-commerce Alibaba IPO which was 25 billion dollars in 2014.

It is expected that this IPO will be popular among the retail investors in Saudi Arabia and they are offered 0,5 % of the company. Institutional investors can subscribe until December the 4th.

The shares will not be offered in Japan, Canada or the US. Aramco is listing the shares in Riyadh Stock Exchange.

Aramco´s IPO is one of the biggest before the Christmas time and closing for the year. The Chinese Alibaba is also trying to arrange its second listing in Hong Kong Stock Exchange this year.

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Saudi’s Aramco to be listed in December

The oil company of Saudi Arabia, Aramco, is to be listed in December. The company and the country’s Capital Market Authority have declared the IPO issues on Sunday.

According to Aramco, the shares are expected to be listed on early December with trading start on 11th December. The valuation of the company, which produces 10% of the world’s oil, is estimated to range between 1,6 – 1,8 trillion dollars. The number and percentage of Aramco’s shares will be seen during the book-building period. According to Bloomberg the IPO offering might be 100-200 billion dollars.

Aramco’s net income last year was 111 billion dollars and 68 billion dollars during January-September this year.

This IPO might be the world largest. The shares are expected to be listed in Riyadh Stock Exchange.

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WeWork valuation below 8 billion dollars – Bloomberg



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US banks start the earnings season next week

The US banks will start the earnings season during next week. For example Citigroup, Wells Fargo, JP Morgan, Goldman Sachs and Bank of America will be in the headlines. One of the big questions is the low interest rates and how the banks are coping with the margins.

It is also a question about the timing. How quickly the banks can swift the low rates to deposits? On the other hand mortgage loans are expected to have shown good trend for banks during the third quarter.

For investment bankers, the recent office-rentals company WeWork´s failed IPO listing might show some write offs in the balance sheet. The market valuation for the WeWork was expected to be around 47 billion dollars before the financial worries started.

The financial markets in general have faced the US China trade talks as an issue for market volatility. Now, when the first phase of the deal between the US and China, has been announced on Friday, the situation is expected to calm down a little when more information of the deal will be revealed.

The market speculation of the low interest rates policy in Europe, US and other Asian countries, is expected to continue while for example the US Central Bank Federal Reserve, Fed is expected to make one rate cut in October, according to Reuters.

The reason for low interest rates policy is the global growth concerns due to geopolitical differences, several trade talks and Brexit. In the UK, the Prime Minister Boris Johnson has said on Sunday that he believes the deal can be reached. On the other hand, the EU´s opinion is that the Brexit Plan is not good enough for the EU leaders Summit on the 17-18th October in Brussels.


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WeWork´s layoffs and credit rating cut

The US office-rental company WeWork has said it is in the process of laying some of its employees after the abandoned IPO process. According to Bloomberg, the size of the layoffs will be published later this month.
The company faced also a credit rating cut from Fitch. According to Fitch, the office provider is now in the CCC+ category, which means a junk bond rating. The credit outlook is now negative.
WeWork was planning a 20 billion dollar IPO deal for this autumn, but the largest owner Softbank decided to postpone the IPO related to market conditions.
After the decision the company also announced changes in the top management. The company has now two co-CEOs Artie Minson and Sebastian Gunningham after the former CEO Adam Neumann decided to step back from operating role and focus on the board work.


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WeWork is postponing IPO to October earliest – WSJ

The US office rental company WeWork is postponing its planned IPO untill October at earliest, says the Wall Street Journal.

According to the newspaper, the company has faced so many valuation concerns that the company is postponing the IPO.

In August WeWork indicated that the listing would be with 3-4 billion dollars. The company also informed about plans to raise debt up to 6 billion dollars.

The recent speculation about the unicorns techvaluation have raised some concerns about the market values in general and the corporate governance practises related for example privacy issues.

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Saudi Aramco IPO delayed – Brent +14%

The weekend oil attacks in Saudi Arabia have lead to postponing the planned IPO of the state oil company. According to Wall Street Journal, the delaying would last so long until the halved production cap would be filled.

The company is planning to list 1 % of its shares in Riyadh Stock Exchange this year with the company valuation of 2 trillion dollars.

After the oil attacks, the oil markets saw a rapid upward trend and for example the Brent Oil was trading 14% up to 68,51 dollars.

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