Donald Trump urges Saudi Aramco to list in New York 

Donald Trump urges Saudi Aramco to list in New York 

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US president Donald Trump has urged Saudi Arabia’s state energy giant to list on the New York Stock Exchange, just as questions mount about the status of the international component of what has been billed as the biggest initial public offering in history.

Mr Trump tweeted on Saturday that he “would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock Exchange.” It is “important to the United States!” he added. 

“I know they’re looking at London, I know they’re looking at others, they’re probably looking at themselves, they have a much smaller stock Market. So I would like them to consider the New York Stock Exchange or Nasdaq,” Mr Trump told reporters traveling with him to Japan on Air Force One on Sunday. “I just spoke to the King a little while ago, and they will consider it.”

The kingdom plans to float around 5 per cent of Saudi Aramco in a stock Market flotation next year as part of an economic reform programme driven by Mohammed bin Salman, the kingdom’s powerful Crown Prince, who believes the company could be worth $2tn. 

Saudi Arabia is working on a listing of the state oil company — the world’s biggest producer — on the kingdom’s domestic Tadawul exchange and is considering a flotation abroad. 

As New York and London have vied to be the international venue for the listing, in a battle among global exchanges that also includes Hong Kong and Tokyo, it has emerged the foreign listing is just one option for a privatisation of Saudi Aramco. 

The direct intervention of President Trump in the IPO process will probably increase pressure on Riyadh to consider a New York listing given its attempts to reinforce the wider relationship. It also poses a challenge to UK prime minister Theresa May, who travelled to Riyadh earlier this year with LSE chief executive Xavier Rolet in tow. 

Saudi Arabia’s finance minister confirmed in an interview with the Financial Times last week the kingdom is also exploring a private stake sale alongside a Tadawul listing. 

“We agreed and we have said publicly that Tadawul is for certain,” Mohammed Al-Jadaan said on the sidelines of an Investment conference in Riyadh. “[But] are we going to go with an international Market? If we go, where are we going? And if we go, are we going public or we are going private.”

Khalid Al Hussan, the head of the Saudi exchange, also told the Financial Times last week he is pushing for the Tadawul to be the “exclusive” venue for the Saudi Aramco listing. 

The comments from Mr Trump and Saudi officials come just weeks after the FT first reported Saudi Arabia was considering shelving the international leg of the IPO in favour of a private sale to strategic Investors, alongside a domestic listing. 

Several people familiar with the IPO preparations said the international flotation could still happen although it would be delayed, while one suggested it could be abandoned entirely.

Saudi Arabia’s highest authorities have yet to make a final decision on the structure of the IPO, which is expected to come by the end of the year.

Saudi Aramco declined to comment on the US president’s tweet. But the company said: “A range of options, for the public listing of Saudi Aramco, continue to be held under active review. No decision has been made and the IPO process remains on track.” 

Thomas Farley, president of NYSE Group, said last week that he had not given up on the IPO and was in discussions with Saudi authorities. 

Lawyers and advisers to Saudi Aramco have raised concerns about the legal and regulatory risks associated with a US listing, which far surpass any other jurisdiction. 

Saudi Arabia moved quickly to reaffirm its longstanding ties to the US after the election of President Trump, after a period where it feared its relationship with its most powerful ally has weakened following the nuclear deal with Iran under Barack Obama. 

Mr Trump’s first official foreign visit as president was to Saudi Arabia in May. His trip came after he had welcomed Prince Mohammed to the White House in March in what was described by the administration as a “historic turning point” in US-Saudi relations.

Additional reporting by David Sheppard and Demetri Sevastopulo

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Source: ft.com

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