NYSE looks to allay Saudi Aramco fears ahead of listing

Alex Ibrahim, head of international capital markets for the New York Stock Exchange (NYSE), said that all the world’s other major oil firms had chosen to list on the NYSE. (AN Photo)
Updated 09 March 2018

NYSE looks to allay Saudi Aramco fears ahead of listing

NEW YORK: Only Wall Street can offer Saudi Aramco the exposure to capital that it needs for a successful public listing, according to a top New York Stock Exchange (NYSE) executive.
Alex Ibrahim, head of international capital markets for the New York Stock Exchange (NYSE), told Arab News that all the world’s other major oil firms had opted for NYSE.
It comes as Saudi Arabian officials eye several global bourses to sell 5 percent of the national oil company via an initial public offering (IPO) expected later this year.
“If you look at the US capital markets and compare it to London Hong Kong, look at the size of this market and how many companies in the oil center are listed here,” Ibrahim told Arab News at the 225-year-old Wall Street institution.
“The two largest oil companies from the United Kingdom are listed here. We trade them more here than in the local market. This is a very deep market for the oil sector and (Aramco) should take that into consideration when they decide.”
London, Hong Kong and other bourses have less experience with “very large complex transactions” like the looming Aramco share sale, which could raise some $100 billion or more in what would likely be the world’s biggest IPO, added Ibrahim.
He spoke as Crown Prince Mohammed bin Salman concluded a three-day visit to Britain, which is also fighting to win the prize listing.
New York and London have long been the front runners to host a potential international leg of the flotation, alongside a Riyadh listing.
On Thursday, Saudi Energy Minister Khalid Al-Falih expressed fears about the risks Aramco would run by choosing New York as the venue for its market offering, saying that “litigation and liability are a big concern in the US.”
Companies face a heavy regulatory burden when they list publicly in the US. Saudi oil chiefs are understood to be anxious about law suits over everything from climate change to anti-terror financing rules.
Saudi Arabian Oil Co, known as Saudi Aramco, has prepared for the IPO to take placeas early as this year.
Saudi Aramco has been valued at as much as $2 trillion — more than six times the value of Exxon Mobil.
A deal of that size would be a prize for the world’s leading stock markets, and they’re lobbying fiercely for the business.
Chris Taylor, NYSE’s vice president of listings and services, said:
“Over the last four years, there have been 38 IPOs in the US that have raised $700 million or more. Every single one of them chose the NYSE as its bourse.”
The IPO is a cornerstone of the Kingdom’s Vision 2030 social and economic transformation blueprint,
Proceeds from the sale will be pumped into technology, tourism and other sectors.


Saudi finance minister reassures public on taxes

Updated 36 min 21 sec ago

Saudi finance minister reassures public on taxes

  • Mohammed Al-Jadaan: There will be no more fees and taxes until after the financial, economic and social impacts have been considered carefully
  • The government expects to generate about SR203 billion in taxes this year – more than 20.5 percent higher than the previous year

RIYADH: Saudi finance minister Mohammed Al-Jadaan pledged that there would be no more taxes or fees introduced in the Kingdom until the social and economic impact of such a move had been fully reviewed.

He was speaking at the 2020 Budget Meeting Sessions, organized by the Ministry of Finance and held in Riyadh on Tuesday, where a number of ministers and senior officials gathered following the publication of the budget on Monday evening.

“There will be no more fees and taxes until after the financial, economic and social impacts have been considered carefully, especially in terms of economic competitiveness,” said Al-Jadaan.

The government expects to generate about SR203 billion in taxes this year – more than 20.5 percent higher than the previous year and more than 10 percent higher than the expected budget for this year. 

Most of that increase has come from taxes on goods and services which rose substantially as a result of the improvement in economic activity over the year.

The reassurances from the minister come as the Saudi budget deficit is estimated to widen to about SR187 billion, next year, or about 6.4 percent of GDP.