Wow, Wow, Wow! 1Q16 GDP Raised To 0.8% -- Mary 27, 2016; The Saudi Aramco IPO -- Not In Any Hurry -- Inshallah

After weeks of massaging the data, the government was able to revise the 1Q16 GDP estimate ... upward ... drum roll ... 0.8%. The market's reaction? Dow futures are up ... 12 points. Green, but for all intents and purposes ... flat. But at least it's green. I can't wait to hear how Ms Yellen spins this story. I won't be listening to CNBC's spin on the spin.

************************

A Date Etched In The Sand

I'm sure this was "known" by everyone "in the know" but somehow I missed it.

Quick: when is the Saudi Aramco IPO going to be launched?

LOL.

No one knows. Not even the company's chief executive Amin Nasser who said the Saudis are "working very seriously on the IPO." Which is very good news. To hear that they are working "very seriously" on the IPO.

It looks like Saudi Aramco will hit its stride about the time MuskMelon delivers his 500,000th Model 3 Tesla. This is the time frame:

The company is finalising its proposals and will present them to its Supreme Council soon, which could see part of Aramco publicly listed by 2017-18. However, Nasser said the timeframe was not set yet.

Wow, the operative phrase in that note: "could see." Inshallah.

Parse that statement closely:

• could see an IPO
• could see the listing by 2017 - 2018

Could see the IPO? Does this mean that it's possible there won't even be an IPO? Once the Supreme Council sees how much information the EU and the SEC want, my hunch is the Supreme Council is going to get very, very cold feet (no matter how hot the sand is). For a paltry $10 billion in cash, the Saudis are going to have to divulge tons of information on their operations that they've held secret for decades.

It was always the implication that Saudi needed the cash now and needed it quickly, but if they are putting this off to 2018, and if oil goes back to $100/bbl or even higher, they are not going to need this additional cash. They can implement Vision 2030 without raising cash on the open market.

As part of Aramco's market share push, the company plans to raise its total refining capacity - both inside the kingdom and abroad - to 8 million-10 million barrels per day from around 5.4 million bpd now.

This week it signed an agreement to supply up to 270,000 bpd of crude oil to a refinery it will jointly upgrade with Indonesia's Pertamina.

Forecasting growing crude oil demand, Aramco has said it was seeking to invest further downstream as part of broader expansion plans in several markets such as China, India, Vietnam and the United States.

The Salman Plan is linked at the sidebar at the right.

Update: Bloomberg has a long, long article on Saudi financing US debt through Treasury bonds going back to Richard M. Nixon. This is one more reason why I think Saudi's Supreme Council will be hesitant to go through with the IPO: the kingdom is going to have to divulge a lot of information in exchange for a few billion dollars. 

*****************************

Extreme Unicycling