INSUBCONTINENT EXCLUSIVE:
plan to open the gates to foreign investment in the kingdom
history, raising $25.6 billion
goal.
However many global investors focused on emerging markets are set to stay away when Aramco debuts on the Riyadh bourse, expected next
week, according to information provided to Reuters by 26 major asset managers outside the Gulf region who collectively manage more than $7
trillion.
Most of the active fund managers said they would likely steer clear of the IPO, citing persistent concerns about risks around
governance, the environment and regional geopolitics.
All of the passive managers, who track certain indexes rather than making specific
investment calls, also said they would not buy shares in the offering
But the bulk of them are likely to routinely become investors when the stock is admitted into the indexes of benchmark providers MSCI, FTSE
Russell and S-P, a development due as early as late-December.
While the responses give an indication of institutional demand, they provide
just a small window into global appetite as they largely concern investments made by funds open to the public
Much larger sums of money are often invested on a private basis on behalf of major players li ke pension schemes and sovereign wealth
funds.
Institutional investors bid $106 billion to take part in the IPO, which was more than 4.6 times oversubscribed, but how much of that
demand came from overseas investors was not disclosed
The last bid process update to do so was published last Friday, and showed foreign institutional demand at 10.5% of the total $38.4 billion
tabled.
TO BUY OR NOT TO BUY Reuters contacted 66 non-Gulf asset managers who all either had exposure to Saudi stocks amounting to at least
5% of their portfolios, or of above 1% to the MSCI's Emerging Markets Index, according to an analysis of data from Morningstar, a US-based
Ten other leading non-Gulf investors who were not on that list were also interviewed.
Of the total of 18 active asset managers who provided
Five said they had not decided while one said it would invest in the offering.
Seven of the eight passive investors that spoke to Reuters
said they would likely buy Aramco shares as and when they were included in their respective benchmark indexes, but would not take part in
