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Saudi Stocks Little Changed as Investors Focus on Aramco’s IPO

Filipe Pacheco

(Bloomberg) -- The main Saudi stocks index finished little changed on Sunday after swinging between gains and losses as investors digested the kingdom’s plan to sell a 1.5% stake in the state oil company.

The Tadawul All Share Index ended 0.1% higher, after climbing as much as 0.4% and retreating as much as 0.7% during the session. Al Rajhi Bank and Alinma Bank added to gains, while Saudi Arabian Mining Co., or Maaden, declined.

Saudi Aramco, the world’s most profitable company, said in an updated prospectus on Sunday that it will offer shares in a range of 30 Saudi riyals to 32 Saudi riyals, for a valuation of as much as $1.71 trillion. Investors may now be positioning for what could be the world’s largest initial public offering at as much as $25.6 billion, even if the stake sale size is smaller than some analyst forecasts.

Investors should expect “a very volatile market today and in the upcoming days,” said Joice Mathew, head of equity research at United Securities in Muscat, Oman. “Banks could get a boost at first, since they could be making some money from it, but the rest of the market could be under pressure.”

Read more details on Aramco’s IPO.

Stocks in Riyadh have underperformed emerging markets since early September, when the Saudi government accelerated preparations to sell shares in the state oil company. Several analysts and investors said that the gigantic IPO could suck liquidity from other shares trading in Riyadh.

Still, banking stocks outperformed the main Saudi gauge last week as analysts and investors focused on potential revenue boosts from brokerage fees and financing products offered to investors seeking to buy Aramco shares. Al Rajhi Bank, the biggest Saudi bank by market capitalization, is up 5.1% this month.

Read more on what investors expected for the valuation of Aramco’s IPO.

Elsewhere in the region, stocks were mixed. Gauges in Israel, Dubai, Kuwait, Egypt and Oman rose as much as 0.7%, while indexes in Abu Dhabi, Bahrain and Qatar declined as much as 1.5%.

To contact the reporter on this story: Filipe Pacheco in Dubai at fpacheco4@bloomberg.net

To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, Neil Denslow, James Amott

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