Trump Urges Saudi Arabia to List State Oil Company on NYSE


 

On Saturday President Trump made an appeal to the Saudi kingdom, tweeting, “Would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock Exchange. Important to the United States!”

Trump’s tweet came hours before he was set to set to depart for his 11 day tour in Asia, and was good news for American regulators who have looked to the administration to lure companies to US stock exchanges.

Aboard Air Force One, Trump told reporters that he was motivated to send the Aramco tweet because its IPO “will be just about the biggest ever” and the US wants “to have all the big listings.”

“I want them to consider, because right now they’re not looking at it, because of litigation, risk and other risk, which is very sad, they’re not looking at it, but I want them to strongly consider the New York Stock Exchange or NASDAQ, or frankly anybody else located in this country, but those are the big two,” Trump said.

The initial public offering (IPO) for Saudi Arabia’s State owned oil company Aramco, and could be one of the largest in history. Saudi Arabia is expected to take around 5 percent of Aramco, which controls some of the world’s largest oil reserves, public sometime in 2018; potentially raising up to $100 billion, giving the company $2 trillion valuation. Even if Aramco raises half of its goal, it will still double the current largest IPO, which was raised by Chinese Alibaba Group Holding Ltd. in 2014.

Saudi Arabia is expected to list Aramco’s shares on their own stock market, Tadawul, while also dual listing with another stock exchange internationally. Some have speculated Aramco to be one of the world’s most valuable companies when it goes public.

NYSE Group President Thomas Farley is said to have been in discussions with Saudi authorities, lobbying for the international listing. Other politicians  such as British Prime Minister Theresa May and Japanese Prime Minister Shinzo Abe have lobbied Riyadh in an attempt to attract Aramco to their domestic exchanges. However, the state owned oil behemoth finances have long been less than transparent, and its said that lawyers and bankers working on the IPO have concern that a public listing in either New York or London could bring unwanted scrutiny and demands for greater transparency by shareholders due to strict regulations about oil-reserves disclosure, accounting rules and the potential for litigation.

Aramco’s public listing is a crucial element of Crown Price Mohammad bi Salman’s “Vision 2030” effort to improve the Saudi economy, which has suffered in recent years due to the drop in oil prices. The Crown Prince’s reform plan looks to diversify the kingdom’s economy whilst increasing investment in the country’s infrastructure.

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