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Oil Stabilizes As OPEC Implements Cuts

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Global Intelligence Report - 16th January 2019

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Tadawul Seeks Exclusive Aramco Listing

Oil

As if the waters surrounding Saudi Aramco’s listing wasn’t muddied enough, the Kingdom’s very own bourse has now proclaimed its ambitions to become the only exchange where the company’s shares will be listed.

Tadawul’s boss, Khalid al-Hussan, told the Financial Times yesterday that the bourse will push for an exclusive domestic listing of the oil giant’s stock, instead of the planned global listing including at least two exchanges.

Al-Hussan said that the exchange is doing everything it can to get the exclusive listing because it would, he said, put Tadawul on the global stock exchange stage. The chief executive also said he did not mind a private share placing along with the Tadawul listing.

The news comes soon after reports emerged—in the FT first—that Aramco was considering a cancellation of the international IPO. The Saudi company rejected the report, reiterating that the listing was on track as initially planned for the second half of 2018. But doubts linger and the controversy intensifies around the preferred international exchange for the Aramco listing: LSE.

After the UK financial markets watchdog came under fire earlier this year for proposing a change in LSE listing rules to make way for the Saudi energy giant, its boss admitted he had held talks with Aramco representatives prior to the proposal for changes.

LSE’s chief executive insisted that the proposed changes had nothing to do with Aramco specifically, as there was no rule for a minimum 25-percent float for the premium segment of the bourse, which Aramco is eyeing. Yet this would hardly be enough to convince investors that it’s safe to invest in a state-owned company whose majority shareholder would have very extensive decision-making powers at the expense of minority stakeholders.

Related: Saudi Arabia To Move Beyond Oil And Islam

The latest chapter in the saga aired last week, when it emerged that Aramco had asked FTI Consulting to suspend investor relations work on its upcoming initial public offering, according to unnamed sources who spoke to Reuters. The sources did not elaborate on the reasons the Saudi state energy company nixed the work, but one of them suggested that it could extend the responsibilities of another advisory firm, Brunswick.

Yesterday, Aramco’s chief executive said that the company is considering LSE, NYSE, the Tokyo Stock Exchange, and the Hong Kong bourse for the international leg of its listing, without going into detail. “All detailed information is currently being reviewed by our shareholder and in due course a decision will be made about the listing venue,” Amir Nasser said.

By Irina Slav for Oilprice.com

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