New York wants Saudi Aramco and other Gulf IPOs: Top NYSE official

Saudi Aramco is believed to be considering a listing in either New York or London in addition to the Tadawul in Riyadh, as well as a possible presence on an Asian exchange. (Reuters)
Updated 07 August 2017
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New York wants Saudi Aramco and other Gulf IPOs: Top NYSE official

DUBAI: The New York Stock Exchange, the world’s biggest stock market, has launched a campaign to convince Middle East companies that it is the best place for big initial public offerings (IPOs), including the record-breaking forthcoming listing of Saudi Aramco.
Alexandre Ibrahim, the NYSE’s head of international capital markets, was in the UAE last week meeting advisers and corporate executives to persuade regional companies to consider New York ahead of global rivals like London for IPOs.
“We’re talking more now with Middle East chief executives than we were a year ago. If there is going to be a wave of IPOs here we want to explain that there are alternatives around the world. If there’s a planned listing anywhere in the world, we want to be part of that conversation,” he said in an exclusive interview with Arab News.
His visit comes as at least six companies in the UAE are believed to be considering IPOs, with some of them looking at the London Stock Exchange as a possible listing venue, in some cases alongside a listing on regional markets.
The biggest are Emirates Global Aluminium, with plans to raise about $3 billion, and the service operations of Abu Dhabi oil company ADNOC, with a similar target in its sights.
Although Ibrahim did not have meetings scheduled on the recent trip with representatives of Aramco, which is believed to be looking to raise up to $100 billion next year in the biggest IPO in history, he made it clear that NYSE wants to stage the Aramco IPO, and has already had talks with the Saudi giant.
“I can assure you that if a company has announced plans for an IPO, we are most likely speaking to them about the possibilities of listing on the NYSE. The NYSE excels at large, complex transactions, such as Alibaba. In fact, we’ve listed all of the largest IPOs for the past three years,” he said.
Alibaba, the Chinese online retailer, was the most valuable IPO ever when it sold shares on NYSE in 2014 in a $25 billion offering.
In a clear reference to Aramco, Ibrahim underlined the fact that the world’s biggest energy companies are also listed in New York. “NYSE is by far the biggest market for this sector, with most of the big names in global energy listed here — names such as Exxon, BP and Petrobras. Our market cap in the energy sector is significantly bigger than all of the other exchanges combined,” he said.
Aramco is believed to be considering a listing in either New York or London in addition to the Tadawul in Riyadh, as well as a possible presence on an Asian exchange such as Tokyo or Hong Kong.
So far, London has advanced the strongest case, with the UK regulator showing it is prepared to be flexible in listing requirements by creating a whole new category for sovereign listings. Some advisers to Aramco were recently reported to have recommended London as the main foreign listing center.
However, no final decision has been taken on the venue. Senior Saudi policymakers are thought to be more inclined toward New York, given the new “reset” relationship between the Kingdom and the US under President Donald Trump, cemented by the presidential visit to Riyadh in May.
New York, under its regulator the Securities and Exchange Commission (SEC), is often believed to have more rigorous rules on disclosure and transparency than London. The Sarbanes Oxley laws enacted after the Enron scandal in 2002 are often regarded as the strictest in the world, with severe penalties on individual executives for inaccurate financial information or fraudulent activity.
In addition, energy companies in the New York regime face tougher requirements on reporting oil reserves and earnings, and a more litigious culture among American lawyers.
However, NYSE officials are likely to point out that some of the more stringent measures of Sarbanes Oxley have been relaxed, for example with the 2012 Jobs Act aimed at encouraging smaller public listings.
Foreign companies are also exempt from some of the tough corporate governance rules of Sarbanes Oxley.
Further visits to the Arabian Gulf, including Saudi Arabia, are being planned for later this year, Ibrahim said.
No Middle East company has ever listed on the NYSE. Aramex, the regional logistics leader, had a quote on the rival Nasdaq market until 2002, when it was taken private by regional investors.
Some experts believe an NYSE quote for a Gulf company would allow it to be regarded as a proxy for emerging market investment by US institutions, which are currently unable to invest in equity in the Middle East via their own exchanges.
Ibrahim added: “An NYSE listing is not just a one-off transaction, but the beginning of an ongoing relationship with our listed companies.”


Palestinians in financial crisis after Israel, US moves

Updated 22 March 2019
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Palestinians in financial crisis after Israel, US moves

  • A Ramallah-based economics professor said the Palestinian economy more generally, remain totally controlled by and reliant on Israel
  • Israeli-Palestinian peace efforts have been at a standstill since 2014

RAMALLAH, Palestinian Territories: The Palestinian Authority faces a suffocating financial crisis after deep US aid cuts and an Israeli move to withhold tax transfers, sparking fears for the stability of the West Bank.
The authority, headed by President Mahmud Abbas, announced a package of emergency measures on March 10, including halving the salaries of many civil servants.
The United States has cut more than $500 million in Palestinian aid in the last year, though only a fraction of that went directly to the PA.
The PA has decided to refuse what little US aid remains on offer for fear of civil suits under new legislation passed by Congress.
Israel has also announced it intends to deduct around $10 million a month in taxes it collects for the PA in a dispute over payments to the families of prisoners in Israeli jails.
In response, Abbas has refused to receive any funds at all, labelling the Israeli reductions theft.
That will leave his government with a monthly shortfall of around $190 million for the length of the crisis.
The money makes up more than 50 percent of the PA’s monthly revenues, with other funds coming from local taxes and foreign aid.

While the impact of the cuts is still being assessed, analysts fear it could affect the stability of the occupied West Bank.
“If the economic situation remains so difficult and the PA is unable to pay salaries and provide services, in addition to continuing (Israeli) settlement expansion it will lead to an explosion,” political analyst Jihad Harb said.
Abbas cut off relations with the US administration after President Donald Trump declared the disputed city of Jerusalem Israel’s capital in December 2017.
The right-wing Israeli government, strongly backed by the US, has since sought to squeeze Abbas.
After a deadly anti-Israeli attack last month, Prime Minister Benjamin Netanyahu said he would withhold $138 million (123 million euros) in Palestinian revenues over the course of a year.
Israel collects around $190 million a month in customs duties levied on goods destined for Palestinian markets that transit through its ports, and then transfers the money to the PA.
Israel said the amount it intended to withhold was equal to what is paid by the PA to the families of prisoners, or prisoners themselves, jailed for attacks on Israelis last year.
Many Palestinians view prisoners and those killed while carrying out attacks as heroes of the fight against Israeli occupation.
Israel says the payments encourage further violence.
Abbas recently accused Netanyahu’s government of causing a “crippling economic crisis in the Palestinian Authority.”
The PA also said in January it would refuse all further US government aid for fear of lawsuits under new US legislation targeting alleged support for “terrorism.”

Finance Minister Shukri Bishara announced earlier this month he had been forced to “adopt an emergency budget that includes restricted austerity measures.”
Government employees paid over 2,000 shekels ($555) will receive only half their salaries until further notice.
Prisoner payments would continue in full, Bishara added.
Nasser Abdel Karim, a Ramallah-based economics professor, told AFP the PA, and the Palestinian economy more generally, remain totally controlled by and reliant on Israel.
The PA undertook similar financial measures in 2012 when Israel withheld taxes over Palestinian efforts to gain international recognition at the United Nations.
Abdel Karim said such crises are “repeated and disappear according to the development of the relationship between the Palestinian Authority and Israel or the countries that support (the PA).”
Israel occupied the Gaza Strip and the West Bank, including now annexed east Jerusalem in the Six-Day War of 1967 and Abbas’s government has only limited autonomy in West Bank towns and cities.
“The problem is the lack of cash,” economic journalist Jafar Sadaqa told AFP.
He said that while the PA had faced financial crises before, “this time is different because it comes as a cumulative result of political decisions taken by the United States.”
Abbas appointed longtime ally Mohammad Shtayyeh as prime minister on March 10 to head a new government to oversee the crisis.
Abdel Karim believes the crisis could worsen after an Israeli general election next month “if a more right-wing Israeli government wins.”
Netanyahu’s outgoing government is already regarded as the most right-wing in Israel’s history but on April 9 parties even further to the right have a realistic chance of winning seats in parliament for the first time.
Israeli-Palestinian peace efforts have been at a standstill since 2014, when a drive for a deal by the administration of President Barack Obama collapsed in the face of persistent Israeli settlement expansion in the West Bank.