World bourses com­pete for Aramco list­ing

New Straits Times - - Business -

DUBAI: Saudi Ara­bia aims to sell about five per cent of Saudi Aramco in an ini­tial pub­lic of­fer­ing (IPO) next year, and stock ex­changes from the United King­dom to Ja­pan are vy­ing for what may be the world’s rich­est IPO.

Saudi Crown Prince Mo­hammed Sal­man will soon de­cide where to sell the com­pany’s shares af­ter gov­ern­ment of­fi­cials heard a pre­sen­ta­tion on the list­ing process last week.

The king­dom plans to list on the Saudi stock ex­change in Riyadh and choose to sell shares on at least one bourse out­side the coun­try.

That choice pits fi­nan­cial cen­tres against each other for a sale that could value the oil ex­porter at as much as US$2 tril­lion (RM8.56 tril­lion).

LON­DON im­proved its chances when reg­u­la­tors over­see­ing the Lon­don Stock Ex­change (LSE) pro­posed rule changes last month that would make it eas­ier for gov­ern­ments to list their state-backed en­ti­ties. The changes would al­low Aramco’s shares to trade on the LSE’s premium seg­ment, with ac­cess to a wider pool of in­vestors than a stan­dard list­ing.

NEW YORK’S ap­peal as the fi­nan­cial hub of the world’s big­gest econ­omy is en­hanced by the re­la­tion­ship Mo­hammed has cul­ti­vated with United States Pres­i­dent Don­ald Trump. Aramco has been one of three big­gest crude sup­pli­ers to the US over the last four decades.

The com­pany also owns the big­gest US re­fin­ery, a plant in Port Arthur, Texas, through its wholly owned sub­sidiary Mo­tiva En­ter­prises LLC.

In the case of HONG KONG, Aramco sells two-thirds of its oil to Asia, with China one of its big­gest buy­ers. The com­pany has a re­fin­ing ven­ture in Fu­jian, and is in talks to start two more plants.

China In­vest­ment Corp, the na­tion’s sov­er­eign wealth fund, could take part in an Aramco IPO. China’s state oil com­pa­nies also may buy shares in Aramco.

TOKYO AND SIN­GA­PORE made ag­gres­sive pitches to Saudi au­thor­i­ties for the list­ing. A list­ing in Ja­pan, where Aramco owns shares in a re­finer, would en­able the com­pany to tap into a separate in­vestor pool it can’t ac­cess else­where, said Akira Kiy­ota, Ja­pan Ex­change Group’s chief ex­ec­u­tive, in July.

Sin­ga­pore is the big­gest oil trad­ing cen­tre in Asia. The Sin­ga­pore Ex­change is the smallest of the bourses com­pet­ing to list Aramco shares, but it’s said to be plan­ning a slew of in­cen­tives to lure a list­ing. The is­land na­tion is said to be study­ing pro­pos­als in­clud­ing invit­ing one of its state in­vest­ment com­pa­nies to be­come a corner­stone in­vestor.

TORONTO is also among the smaller con­tenders for the IPO, but the bourse has high­lighted the large num­ber of com­modi­ties com­pa­nies listed there. En­ergy and ma­te­ri­als stocks ac­count for about two-thirds of the TSX Ven­ture in­dex and a third of the S&P/TSX Com­pos­ite In­dex. Bloomberg

BLOOMBERG PIC

Saudi Ara­bia plans to list Saudi Aramco shares on the Saudi stock ex­change and sell shares on at least one bourse out­side the king­dom.

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