Calling all women and children: Aramco widens net in bid to secure valuation


Virginia Furness
Published on:

Saudi Aramco’s intention to list aims to clear up any doubts wealth managers may have about investing on behalf of women, but it also draws attention to the fact that, despite reforms, the full inclusion of women in Saudi society is still a distant reality.


Mothers, widows and female divorcees may not be the most common subset of investors in an international IPO but Saudi Aramco’s pre-offering document is appealing to this particular demographic in a bid to secure its valuation target.

On November 3, Aramco revealed its intention to list on the Saudi stock exchange, or Tadawul, starting the formal investor education process for the listing ‒ which analysts estimate could be anywhere from just above $1 trillion to $2 trillion. It is targeting both domestic and international investors.

The sale of the world’s largest oil company is at the heart of Saudi Arabia’s national transformation plan ‒ a successful deal will mark not only a major step in the opening up of Saudi’s economy but a vote of confidence in Crown Prince Mohammed bin Salman’s Vision 2030. But women are at the heart of the reform plan too.

A central pillar of Vision 2030, Saudi Arabia aimed to increase the economic participation rate of women in the country from 17% to 25% by 2020. Progress has been made – women can now drive, divorce men and travel alone – but they still remain restricted in Saudi society.   

Feedback from international institutional investors is so far mixed ‒ several of the world’s largest funds, including Norway’s sovereign wealth fund, have said they will not participate, and others say valuations look expensive versus other oil majors – so the push to attract retail and Saudi-based investors, including women and children, is more evident.

Bonus shares are on offer to those who hold their allotted shares for 180 days, underscoring the importance the company places on retail investment.

Civil liberties

The documentation also makes specific reference to female divorcees or widows with minor children from a marriage to a non-Saudi person as eligible to participate – for her own benefit, or in the name of her children – in the listing under tranche B, which will be sold to individual investors.

This clears up any concerns private banks and wealth managers in Saudi Arabia may have about buying shares on behalf of non-Saudi minors, widows or divorcees, a London-based capital markets lawyer says.

“The main focus is really to allow divorced and widowed women to subscribe for shares on behalf of their non-Saudi minor children (the children will be treated as Saudi retail investors even though they may not yet have Saudi citizenship as minors),” explains a Saudi-based equity capital markets lawyer. “So it is just plugging what would otherwise be a perceived gap in the legislation.”

A question investors must ask themselves is whether the coming international engagement in Saudi will result in a better outcome for its citizens 

It is not unusual to see language targeting women in domestic Saudi listings, according to other lawyers used to structuring such deals, but Aramco is the most high-profile deal to come out of the country and the language draws attention to the lesser role women hold in Saudi’s economy.

Women still need the consent of a man to marry, or to leave a domestic violence shelter, and experts warn that male relatives can still obstruct women through legal avenues or informal routes, according to reports by Reuters.

This deal is asking investors to buy flagship sovereign risk in a country where at least 50% of the population is subject to reduced civil liberties.

A question investors must ask themselves is whether the coming international engagement in Saudi will result in a better outcome for its citizens, or will the capitalist West simply be doing a deal that perpetuates the issues.

This could be an opportunity for the buy-side to influence policy and to accelerate reforms ‒ Saudi Arabia needs foreign investment, but investors could withhold it and demand change.


Women have been the subject of Mohammed bin Salman’s much-publicized reforms; in June 2018 he lifted a ban on female drivers, and this year introduced laws that allow women to travel without the permission of a male guardian.  

The relaxation of the guardianship model is certainly progress and, according to a recent study by PwC, 48% of university students are women.

But female labour force participation in Saudi Arabia remains among the lowest in the world, with World Bank data estimating that women made up just 22.3% of the workforce in 2018, well below both Kuwait at 46.9% and the UAE at 40.6%.

In addition, several prominent women’s rights activists detained in the summer of 2018 remain imprisoned, according to Amnesty International in August.

In the same way that investing in this fossil fuel giant should not sit comfortably with those for whom environmental issues are at the heart of their investment strategies, those with social and governance mandates should consider the treatment of women as part of their investment decision.

While the domicile countries of other oil majors may throw up similarly problematic issues, this is not a licence to invest in Aramco.