Ryad (AFP)

Between religious approvals and nationalistic exaltation, Saudi Arabia has done everything to attract investors before the IPO in Ryad of its oil giant Aramco, but the enthusiasm is relatively limited and the results of the operation could disappoint.

The company with the highest profit in the world seeks to raise about $ 25 billion - a quarter of the 100 billion previously hoped for - thanks to its very delayed IPO, which is essentially aimed at investors in the kingdom and the Gulf.

Aramco announced last week that the number of shares subscribed by investors had exceeded the number of shares offered for sale. But if the rate of oversubscription is 1.7 times the initial offer, it remains very far from that of the introduction of the National Commerce Bank in 2014: the number of shares subscribed had then reached more than 23 times the number of proposed titles.

In 2006, 10 million Saudis (more than a third of the population) had subscribed for shares in emirati real estate giant Emaar, compared to five million for Aramco.

"The signs indicate that it is unlikely that this is the successful sale that the kingdom was hoping for," according to the economic analysis center Capital Economics.

If the operation could still break the record of 25 billion dollars raised by Chinese online trading giant Alibaba, these revenues "barely cover the budget deficit of the kingdom for a year," according to Capital Economics.

Except for a last-minute infatuation by institutional investors, interest in Aramco listing seems relatively low despite the riotous ads, the facilitation of loans offered by banks to allow individuals to buy securities and speeches nationalists who have made investment a patriotic duty.

- "We are lost" -

Aramco has also provided local investors with promises of higher dividends and the opportunity to obtain additional free shares if they hold their shares for some time.

But the individuals are torn apart: the high dignitary religious Abdallah al-Moutlaq affirmed that the operation was "halal" (authorized by Islam) in opposition to the influential religious Abdelaziz al-Fawzan, who qualified it of "haram".

"I want to subscribe (shares) but (...) we are lost between the two," complained a user on Twitter.

Some of the wealthiest families in Saudi Arabia have been forced to invest, including billionaire prince Al-Walid bin Talal, who was among the businessmen locked up in Ryad's Ritz-Carlton Hotel during a crackdown. " anti-corruption "of 2017.

"If I do not invest, people will say that I am not a patriot," says a businessman from Ryad to AFP. "But I can not forget 2006," he adds, claiming that he lost around one million riyals (242,000 euros) in the worst stock market crash in the kingdom's history.

"Saudi Arabia extracts oil from the ground for barely $ 3 per barrel (...) Even if crude prices remain low, this company will remain extremely profitable for a long time," said a senior official for AFP of the government.

- "Excess" of nationalism -

The valuation targeted by Aramco could reach 1.7 trillion dollars. This is less than the 2,000 billion wanted by the Crown Prince but more than what foreign institutions are willing to invest, according to analysts.

Aramco said Friday that foreign investors have so far represented only 10.5% of the $ 31.7 billion in bids received so far from institutional investors.

Petronas, the Malaysian national energy company, which was to invest, announced in a statement that "after careful consideration, it decided not to participate" in the IPO of Aramco.

The subscription period for institutional investors runs until December 4. The final price of the stock should be announced the next day while trading securities should start a week later.

Faced with this lukewarm demand, Aramco executives have for the moment canceled the plans for a stock market introduction in the United States or Europe, focusing almost entirely on Gulf investors.

"The Aramco IPO is an economic demonstration of the strengths and weaknesses of Saudi Arabia's new dependence on nationalism," Kristin Diwan, a researcher at the Arab Gulf States Institute, told AFP. in Washington.

"People can be mobilized to fulfill national goals, but international support is weakened by its excesses," she adds.

© 2019 AFP