From left: Tom Lind from Al Ahli Bank of Kuwait, Anwar Abu Sbaitan from Kamco and Naveed Aurakzai from Al Khair Capital during a roundtable discussion at the DIFC. Aurakzai expects a DFM recovery in 2019, when GDP grows by about 3 per cent. Image Credit: Siddesh Suresh Mayenkar/Gulf News


The delay in listing of the Aramco on the bourses, which was expected to get gush of liquidity in Saudi and regional markets, would not have an impact on local bourses, according to Naveed Aurakzai, chief executive officer at Alkhair Capital.

According to reports Saudi Crown Prince Mohammad Bin Salman now expects the primary offering of Aramco to take place in 2021, sticking to the overall valuation of $2 trillion (Dh7.35 trillion).

“The IPO was only 5 per cent of the company, although the amount was big. The overall intention of the IPO was not liquidity but to open up the market. The objective will still be achieved regardless of the delay or no delay in the IPO of Aramco,” Aurakzai told Gulf News on the sidelines of a press conference.

The Aramco IPO was part of the Saudi Vision 2030, and was the cornerstone of initiating reforms in the economy, and the proceeds of which were supposed to go to the Public Investment Fund (PIF). But the plans got delayed because of the merger of Saudi Basic Industries with Aramco, which was valued at $70 billion.

Talking about other equity markets including Dubai, Aurakzai said: “We don’t see an overnight recovery in Dubai market. We see recovery in 2019, when the GDP will grow by 3 per cent.”

Aurakzai feels that the recent government reforms of higher duration visa along with easy tourist visas will bear fruit. The Dubai Financial Market general index, which has shed 18 per cent in value, has been the worst performing equity market regionally.

At the same time, companies have been making a beeline for issuing bonds, which have been bracing for more rate hikes.

“The low hanging fruit is that people have programme-ready for fixed income they are rushing in for sukuk market, so we saw influx of issues coming out, and we see a good demand for issuances this year. They are tapping in the market before the markets get unaffordable,” Aurakzai said.

“The equity market has been lagging behind, and it’s about time for companies to consider that and support and come and list in the market. Another alternative will be to open the sukuk market for retail investors,” he added.

About 80 per cent of the participants in equity markets in Saudi are retail investors.