Saudi Aramco IPO Team Favors London For Foreign Listing

Saudi Arabia’s financial advisors are recommending that London, not New York, should host Saudi Aramco’s initial public offering, set to take place next year, according to sources that spoke to Reuters. 

Earlier rumors had it that newly crowned Prince Mohammed bin Salman preferred New York for the listing due to its connections to deep-pocketed investors.

London stock market authorities have previously proposed creating a new category of listings on the exchange to accommodate Aramco’s requirements, sparking much controversy.

A final decision on the location of the IPOs foreign listing had been due before Ramadan, but a month has passed since the end of the Islamic holy month and no decision has been made. The latest update on the listing suggests that a final proposal could be presented to the government in the fourth quarter 2017.

More information on Aramco’s IPO is expected to come out of a conferenced organized by Saudi Arabia’s Public Investment Fund on October 24 through 26 in Riyadh, according to sources.

Tensions between the United States and Saudi Arabia have been brewing since the Obama years. In 2015, Congress passed a bill that would allow 9/11 victims’ families to sue the KSA for compensation for their lost relatives. President Obama vetoed the bill, but Congress approved an override. Still, Riyadh did not make good on threats to withdraw major investments if the bill became a law.

Though Saudi Arabia had banked on Democratic candidate Hillary Clinton’s victory in the 2016 elections, Donald Trump’s rise has bred new hope for the improvement of the U.S.-Saudi Arabia dynamic. Trump visited Riyadh back in May as part of his Middle East tour, where he openly chastised Iran in his speech, in what many saw as fanning the flames of regional rivalries.

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Bin Salman is currently implementing the Vision 2030 economic revitalization plan that will diversify the country away from its oil dependency. The sale of five percent of Aramco to private investors in the IPO will fund Vision 2030’s ambitions to make the KSA a commodities and services-based economy.

Neither Aramco, the NYSE or London would comment on the reported leanings toward London.

By Zainab Calcuttawala for Oilprice.com

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