New financial market rules aimed at preventing major price drops in newly listed companies on Saudi Arabia’s Tadawul exchange will be ready by the end of this June, in anticipation of what is touted to be the largest IPO in history, of Aramco. The head of the Saudi Capital Market Authority told Reuters it will issue price stabilization guidelines ahead of Aramco’s listing and after that “we can then say that the Saudi market will be fully amenable to accommodate an offering of the size of Saudi Aramco, or indeed of any size,” Mohammed El Kuwaiz said. The price stabilization mechanism protecting newly issued stocks from dropping suddenly involves underwriters of the IPO buying some of the company’s shares as a means to boost its price. The mechanism also kicks in if trade in the newly listed company’s stock is much weaker than expected. Clouds have been gathering over […]