Mideast shares fell on Sunday, as the sour mood from Wall Street and this weekend’s virus headlines conspired to push equities in the region lower.
Not surprisingly, Aramco is under pressure. The shares fell 0.6%, to the lowest since the IPO. It marked the first time the stock has traded under SAR34 since going public.
Although still nearly 6% above the IPO price, the world’s most profitable company has faded steadily since peaking shortly after the overwrought opening in December. The company hit Crown Prince Mohammed’s $2 trillion valuation “target” on December 12. In the top pane, you can see what’s happened since:
More broadly, Saudi shares fell 1% Sunday. OPEC and its allies are considering bringing forward their next meeting in order to discuss measures aimed at supporting oil prices as the coronavirus threatens to derail global growth and crimp travel plans.
And yet, you’ll note from the visual that Aramco had a fairly smooth ride in January considering the circumstances. The death of Qassem Soleimani could well have prompted more attacks on the company’s infrastructure and it still seems likely the Houthis (in Yemen) will continue to target Saudi interests in perpetuity.
And then there’s oil itself, which had its worst month since May in January, and suffered the worst start to a year since 1991 as demand jitters swamped supply disruptions and Mideast tumult to push prices 16% lower.
But thanks in part to the allure of big dividend payouts and “bonus shares” promised to retail investors, Aramco remained relatively stable (yellow box in the visual).
Some of that is almost surely attributable to state-backed buying. It’s simply unthinkable that the monarchy would allow the shares to fall too far, too fast.
Elsewhere in the region on Sunday, Israeli shares tumbled as much as 3.9% before trimming losses. The main gauge is down more than 5% since the virus scare began in earnest.