Saudi Aramco fell for a fourth consecutive session on Sunday, as apparent profit taking following fast-track MSCI and and FTSE inclusion continued.
The shares trimmed early losses of more than 1.8%, but it wasn’t enough to rescue the stock from a fourth daily loss.
The world’s most profitable company has now nearly reversed half of the IPO rally.
Dubai-based Arqaam Capital – which has a buy rating on the shares – says Boubyan Petrochemical Company has been selling Aramco. Apparently, Boubyan subscribed to some $28 million of the shares, and sold all of them after the listing.
MSCI’s addition “is not the final weighting for Aramco”, Franklin Templeton’s Salah Shamma said last week. Retail investors’ shares weren’t taken into consideration in the initial weighting given the incentive that grants a bonus share to those who hold the stock continuously for six months. Aramco’s weight may double following reviews in March and August of 2020.
Amusingly, if you strip out the opening day performance (i.e., the limit-up day), the shares have underperformed the Tadawul All Share.
Aramco was, of course, added to the gauge last week, with the second highest weighting (11.8%) behind Al Rajhi Bank’s 13.9%.
If things don’t turn around for the stock soon, it might be time to start locking some folks up in the Riyadh Ritz until such a time as they turn sufficiently bullish.