28.04.2020 ARAMCO Daily Analysis

28.04.2020 ARAMCO Daily Analysis

Saudi Aramco stock is currently trading at 30.75 Saudi Rial(-0.16%). The country hasn't really recuperated from the effects of the month-long price war. This month has proved that oil plays a really big role in the economies of Middle Eastern countries. A good example is Iraq where approximately 90% of the state budget is directly dependent on oil sales. Oil is currently trading at $20 and sometimes it even goes lower than that and this has caused some of these states that are dependent on oil to face small uprisings. The whole Middle East region faces delays in investment and development plans. Saudi Arabia intends to reduce spending by almost $13 billion but fortunately for it, it has foreign reserves amounting to almost $500 billion which is not the case with most of its neighbors like Bahrain and Iraq. Saudi Arabia has to put a halt also in some of its projects like the Jeddah Tower and the new Megacity in the works. Now in an effort to save themselves the Saudis are planning to sell a stake in their Multi-billion pipeline business and are working with some investment firms like JP Morgan to secure investors but this might not be the best of moves at this time when the Covid-19 is tearing the world apart left right and center because of two reasons, either the investors will want to buy at the cheapest price possible or won't buy at all which doesn't do much justice to Aramco in the end. It might take some time for the oil to gain its former glory and for the stock to start improving so for the moment it's wise to hold on to your horses and bid on time