The imminent listing of oil giant Aramco will be a pivotal moment for Saudi Arab...
RIYADH/DUBAI - The imminent listing of oil giant Aramco will be a pivotal moment for Saudi Arabia’s young and untested Tadawul stock exchange.
Mega-IPOs have a record of causing technical glitches on stock markets as they can lead to a surge in trading orders that swamp an exchange’s system and can prevent investors from buying or selling stock. “You have to have really robust technology in order to support the spike that’s expected with a high-profile IPO,” said Spencer Mindlin, an analyst at Aite Group.
Nonetheless, uncertainty around the exchange’s ability to digest the bumper listing represents another potential hazard for investors already rattled by a September attack on Aramco’s facilities that underlined the geopolitical risk associated with the state oil company. Aramco could offer 1%-2% of its shares, raising as much as $20 billion to $40 billion, sources have told Reuters. A deal over $25 billion would top the record IPO of Chinese retail titan Alibaba on the New York Stock Exchange in 2014.
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