World bourses compete for Aramco listing
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