Saudi state-owned oil giant Saudi Aramco is set to become a 'polarizing stock,' with analysts flagging corporate governance as a key risk for investors.
Aramco's debut, which listed 1.5% of its shares locally on the Saudi Tadawul, is the biggest on record — topping the $25 billionSaudi Aramco eventually plans to list on international exchanges, said Molchanov. But even if that brings in more foreign money, those governance and geopolitical risks mean that it's "not for everybody," he added.
"It is a very unique, very special situation. Quite a polarizing stock, frankly. Some people love it, and some people will never own it," he said.attacks on Saudi Aramco oil facilities in September that shut down half the kingdom's total oil productionMeanwhile, Bernstein initiated coverage on Aramco with an "underperform" rating and a price target of 25.5 riyals per share. That represents a more than 27% decline from its Wednesday closing price of 35.20 riyals a share.
"Aramco should trade at a discount rather than premium to international oil majors. Corporate governance has been identified as the key risk for investors, given that the will continue to own >98% of Aramco," they wrote.
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