Crown Prince Mohammed bin Salman tends to get his way in Saudi Arabia, so the mood in Riyadh on Saturday when a group of investment bankers rejected his wishes must have been frosty. He had wanted an initial public offering to put a value of $2tn on Saudi Aramco, the world’s biggest oil company, but they demurred.
The prince still runs the country and Yasir al-Rumayyan, chairman of Saudi Aramco and head of the kingdom’s sovereign wealth fund, responded by calling off plans for a global IPO in favour of a local offering. Saudi Aramco will probably be valued at $1.7tn, but the prince’s vision of the IPO symbolising his country’s opening up to the world has faded.
It is a telling moment, not only for Saudi Arabia and its crown prince, but for investors. After the aborted IPO of WeWork, the shared offices group, it is another example of public shareholders refusing to accept the lofty valuations of private owners. Companies have enjoyed a good run — making exchanges compete for listings and gaining high prices from investment institutions — but the mood has changed.