What to Watch: Aramco IPO, BP beats forecasts, UK house prices

Edmund Heaphy
Finance and news reporter
A Saudi Aramco oil facility in Khurais, Saudi Arabia. Photo: Maxim Shemetov/Reuters

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

Saudi oil giant Aramco to launch IPO in December

Saudi Arabia’s state oil giant Saudi Aramco is planning to launch its IPO on 4 December, according to media reports.

Citing unnamed sources, the Dubai-based Saudi-owned news channel Al-Arabiya said that the listing would go ahead, but did not elaborate further.

Prince Mohammed of Saudia Arabia hopes the offering will raise $100bn for his country’s redevelopment plans, but that would require a $2 trillion valuation. Analysts have repeatedly cast doubt on the likelihood of the state oil giant reaching that target.

The IPO likely will launch in the first instance on the Riyadh-based Tadawul stock market. It is possible that it will then go abroad.

'Nimbler' BP beats forecasts thanks to refineries

Oil and gas giant BP (BP.L) beat analyst forecasts for third quarter performance thanks to a strong performance at its oil refinery business.

Adjusted income for the third quarter of 2019 was $2.25bn, BP said on Tuesday. That was down 40% on the third quarter of 2018 but well above the consensus analyst forecast of $1.7bn. The oil giant made a loss attributable to shareholders of $700m, driven by a $2.6bn tax charge in the quarter.

Shares in BP slipped by 0.8% at the open in London.

Outgoing BP CEO Bob Dudley said in a statement: “BP delivered strong operating cash flow and underlying earnings in a quarter that saw lower oil and gas prices and significant hurricane impacts.

“Our focus remains firmly on maintaining financial discipline and delivering safe and reliable operations throughout BP. We're also continuing to advance our strategy, making strong progress with our divestment plans and building exciting new opportunities in fast-growing downstream markets in Asia.”

African Export-Import Bank delays IPO in London

The African Export-Import Bank on Tuesday said it was delaying its listing on the London Stock Exchange, blaming “unfavourable market conditions”.

The move, which the bank confirmed would be going ahead only two weeks ago, comes amid increasing fears that Brexit uncertainty has dented the appeal of listing in London.

There have been 29 IPOs on the London Stock Exchange so far this year, compared with 55 in total last year.

The African Export-Import Bank, a trade finance group for Africa, was created in 1993 under the auspices of the African Development Bank.

Also referred to as Afreximbank, it was hoping to raise $250m from its IPO on the London Stock exchange, based on the issuance of global depository receipts, a type of certificate used as an alternative to actual company shares.

UK house prices keep rising despite Brexit turmoil

UK property prices rose in October despite continued political turmoil as Britain edged closer to Brexit, new figures show.

Analysts also predicted prices could continue to rise, fuelled by low interest rates and “pent-up demand” which could be unleashed if uncertainty fades when Britain leaves the EU.

The latest house price index from Nationwide suggests average prices have grown by 0.2% over the past month, and are 0.4% higher than a year ago.

The average UK property was sold for £215,368, with price growth below 1% for an 11th month in a row.

Prices are on average £800 higher than a year ago, compared with a £9,100 increase over the same period to October 2016.

Robert Gardner, chief economist at Nationwide, said growth appeared to have slowed because of weaker global economic growth and an “intensifying of Brexit uncertainty.”

European stocks lower

European stocks fell on Tuesday, with the FTSE 100 (^FTSE) down 0.5%. Germany’s DAX (^GDAXI) was declined by 0.2%, while France’s CAC 40 (^FCHI) was down by 0.12%.

The pound edged lower on Tuesday after prime minister Boris Johnson failed in another bid to force a general election.

The pound was trading 0.3% lower against the dollar (GBPUSD=X) at around $1.28. It fell 0.2% against the euro (GBPEUR=X) to just below €1.16.

What to expect in the US

Futures are pointing to a mixed open for US stocks.

S&P 500 futures (ES=F) are down marginally, as are Dow Jones Industrial Average futures (YM=F). Nasdaq futures (NQ=F) are up slightly.

Companies reporting later on Tuesday in the US include:

  • Electronic Arts (EA)

  • Sprint (S)

  • Kellog (K)

  • S&P Global (SPGI)