Bloomberg/Simon Dawson

Markets

Battle for Saudi Aramco IPO heats up as exchanges vie for supremacy

  • share this article

Securing the listing, which Saudi Arabia expects to raise as much as $100 billion in proceeds, would be a coup for the bourses as they tackle low volumes and increased volatility in financial markets.

Sunday 25, August 2019

The largest global stock exchanges have restarted efforts to court Saudi Aramco as the battle to host the world’s biggest-ever initial public offering (IPO) heats up again, reported Bloomberg.

Top officials from London Stock Exchange Group, the New York Stock Exchange and Hong Kong Exchanges & Clearing have been actively pitching the oil giant in recent weeks. LSE Chief Executive Officer David Schwimmer is among those who visited Saudi Arabia in the past month to woo the state-owned oil giant’s officials.

While Saudi Aramco is planning a local listing on the Tadawul as part of the IPO, it hasn’t made a decision on other venues.

Saudi Arabia commenced preparations for the oil giant listing in July and has already appointed Lazard and Moelis & Co. to advise on the IPO.

LSE’s Schwimmer has travelled to Saudi Arabia several times this year, including to speak on a panel at a Riyadh financial summit in April. The former Goldman Sachs Group dealmaker said at the time he was working closely with the local exchange to help small companies raise external funds.

Schwimmer was also part of a delegation led by Philip Hammond, then the UK’s Chancellor of the Exchequer, that visited the Kingdom in early July for the first meeting of the Economic and Social Pillar of the UK-Saudi Arabia Strategic Partnership Council.

Saudi Aramco’s first attempt at a listing attracted a flurry of pitches from top global exchanges from New York to Tokyo seeking to host the listing. Smaller bourses including Singapore and the Toronto Stock Exchange were also vying for a role. Their hopes were dashed when oil producer put the IPO plans on hold after more than two years of preparations and instead decided to buy a $69 billion stake in local chemical giant SABIC.

Last time around, potential listing venues offered Saudi Aramco a number of inducements as they sought to win the deal. Officials have pitched the idea of a dual listing in Saudi Arabia and Hong Kong in return for anchor investments from Chinese funds.

Hong Kong’s top leader Carrie Lam visited Saudi Arabia in 2017 and promoted the territory’s equity market in meetings with King Salman and senior officials including the energy minister. HKEX Chief Executive Officer Charles Li has also said that proposed trading links allowing mainland Chinese investors to put money into Hong Kong IPOs would act as a lure to major foreign companies like Aramco.

TAGS : Saudi Aramco, Tadawul, LSE, IPO, New York Stock Exchange, Hong Kong Exchanges & Clearing, Toronto Stock Exchange, SABIC

print this article