History at the Stock Market
by Dr Jon Conlin
Back on 15 November a group of students studying the history of Middle East oil visited the university’s Bloomberg Suite, normally the haunt of economics students. Their task: to price the IPO of the decade, Saudi Aramco, by bringing their historical understanding of long-term trends to bear on real-time market data accessible via the Bloomberg terminals.
Now, two months on, how well did these students (historians, remember!) perform? Their estimates ranged from a low of $1 trillion to $2 trillion, Mohammed Bin Salman’s target. Although the $2 trillion target was hit in the days after 1.5% of the firm was floated on Riyadh’s Tadawul exchange, subsequent events in the Gulf have seen them slide.
Those seeking financial advice could do worse than consult one of the student teams, “Leamen Brothers”, whose $1.8 trillion figure is beginning to look rather sensible. Our students’ advice is likely to come with a far, far smaller price tag than the raft of investment banks MBS hired to perform the same task.