BLOOMBERG/WASEEM OBAIDI

REGULATION

SAMA relaxes lending limits for Saudi Aramco IPO

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Plans to market the deal in the US, Canada and Japan were dropped, although foreign investors registered in Saudi Arabia will still be able to buy shares.
MONDAY 18, NOVEMBER 2019

Saudi Arabia Monetary Authority (SAMA) has doubled leverage limits for retail investors looking to buy shares in Saudi Aramco, part of the Kingdom’s effort to boost local demand for what could be the world’s largest initial public offering (IPO), reported Bloomberg.

Saudi banks will be permitted to give leverage to retail customers investing in Saudi Aramco at a ratio of 2 to 1 for every riyal they put toward buying shares, up from the normal regulatory limit of 1 to 1. Banks are permitted to give corporate and institutional customers higher leverage ratios still based on each customers creditworthiness.

Saudi Aramco opened book building for its much-anticipated IPO, pricing its shares at between SAR 30 to 32. The pricing would give the company a valuation of up to $1.71 trillion at the top end of the range, well below the $2 trillion target sought by Crown Prince Mohammed bin Salman since he first mooted an initial public offering in 2016.

TAGS: SAUDI ARABIA MONETARY AUTHORITY SAUDI ARAMCO I IPO
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