Saudi Aramco’s IPO retail incentive bonus holding period ends tomorrow

Saudi Aramco’s IPO bonus holding period, the 180 day-period previously set by the giant oil producer, ends tomorrow, Monday, June 8.

Every eligible retail bonus investor who continuously and uninterruptedly holds offer shares for 180 days from (and including) the date Aramco’s shares debuted on the Saudi Stock Exchange (Tadawul) will be entitled to receive one share for every 10 allocated offer shares so held, up to a maximum of 100 bonus shares.

The Securities Depository Center Company (Edaa) will credit the bonus shares to eligible retail investors’ portfolio as soon as possible within 75 days maximum after the end of the bonus holding period.

No fractional bonus shares will be awarded and each eligible retail bonus investor is entitled to this incentive only once.

Each of the bonus shares will be the same class and have all the same rights as the Offer Shares.

No person will have any rights with respect to the bonus shares until the date such Bonus Shares are transferred into the portfolio of such person.

Edaa will maintain a record of eligible retail bonus investors who are allocated offer shares and monitor their eligibility to receive bonus shares.

Edaa will apply a last-in-first-out approach to monitor the shares transactions in order to determine the number of offer shares in an eligible retail bonus investor’s portfolio that remain eligible for a bonus share award.

Here is the last-in-first-out methodology for the IPO retail incentive:

1- An individual investor is allocated 100 offer shares from retail investors. During the bonus holding period, the investor sold 100 shares and following that, bought 100 shares. What is the number of shares eligible for the bonus shares award?

- Zero, because the allocated offer shares were sold.

2- An individual investor is allocated 100 offer shares from retail investors. During the bonus holding period, the investor purchases 100 additional shares and later sells 100 shares. What is the number of shares eligible for the bonus shares award?

- 100, because the allocated offer shares have remained in the account and the most recently purchased shares are deemed to be the shares that are sold.

3- An individual investor is allocated 100 offer shares from retail investors. During the bonus holding period, the investor purchases 10 additional shares and later sells 50 shares. What is the number of shares eligible for the bonus shares award?

- 60, because the most recently purchased shares are deemed to be the first shares that are sold, with the remaining 40 shares that are sold reducing the number of originally allocated offer shares.

4- An individual investor is allocated 100 offer shares from retail investors. During the bonus holding period, the investor sells 50 shares and later purchases 10 shares. What is the number of shares eligible for the bonus shares award?

- 50, because the balance of shares eligible for bonus shares is permanently reduced to a maximum of 50 upon the initial sale.

Last November, the world's largest oil exporter floated a 1.5% stake, or 3 billion shares in IPO.

Saudi Aramco priced its IPO at SAR 32 per share, the top of its indicative range.

It also allocated up to 1,500 shares to every retail subscriber in its public offering, a full allocation ratio to 97.5% of total subscribers, or 97.5% of total subscribers, Argaam reported earlier.