Market rules ready for Aramco listing ‘by end of June’

Saudi Aramco’s Khurais oil processing facility, 160 km east of the capital Riyadh. The Kingdom has been overhauling its stock market rules to prepare for the local listing of state-owned Aramco. (AFP)
Updated 30 March 2018

Market rules ready for Aramco listing ‘by end of June’

NEW YORK: Saudi Arabia expects to unveil by the end of June rules to prevent large share price drops in newly-listed companies, the final regulatory step for the listing of oil giant Saudi Aramco, the head of the kingdom’s stock market regulator said.

The mechanism, known as price stabilization, is common on developed markets and allows underwriters of an initial public offering (IPO) to use some of the company’s stock to bolster its price, should it fall in the days after it starts trading, or the volume of shares changing hands is weak.

The Kingdom has been overhauling its stock market rules to prepare for the local listing of state-owned Aramco, which is hoping to raise $100 billion or more through a 5 percent stake sale later this year.

Saudi authorities have also said they want Aramco, whose IPO is billed as the world’s largest, to have an international listing, although no decision has been made on the location. This listing could be delayed until Aramco starts trading on the Tadawul, as the Saudi stock exchange is known.

The Capital Market Authority (CMA) issued updated rules in the last couple of months covering how securities are sold in the kingdom and how the offer price of an IPO is calculated using the bookbuild method, Mohammed El Kuwaiz, chairman of the market regulator, told a media event in New York late Wednesday.

“Once (the price stabilization guideline) is issued, we can then say that the Saudi market will be fully amenable to accommodate an offering of the size of Saudi Aramco, or indeed of any size,” he said.

Speaking to Reuters on the sidelines of the event, El Kuwaiz said drafting of the regulation was at “an advanced stage,” and it will be issued before the end of the first half of the year.

The CMA was also expecting to start work by the end of the year on rules governing dual-listings on the Saudi stock market that would be sent out for market feedback early in 2019, El Kuwaiz said.

The timetable could be brought forward if a company approached it wanting to list on another market, he added.


UK ‘to decide on Huawei 5G next week’

Tensions have been rising between the UK and US over Huawei. (AFP)
Updated 25 January 2020

UK ‘to decide on Huawei 5G next week’

  • Chinese tech giant expected to be permitted to develop country’s 5G network

LONDON: The UK is expected to announce next week whether to allow China’s Huawei to develop its 5G network, an official said on Friday, setting out reasons for agreeing despite opposition from the White House.

The official said the decision had not yet been taken but that it was likely to be next week.
There had been speculation that the UK would allow Huawei into “non-core” elements of the next-generation 5G mobile networks, such as antennae and base stations attached to masts and roofs.
The US has banned Huawei from the rollout of its 5G network because of concerns — strongly denied — that the firm could be under the control of Beijing.
Washington has been lobbying London to do the same, even threatening to limit intelligence sharing between the two allies if Downing Street goes its own way.
The UK Business Secretary Andrea Leadsom said this week that a decision would be made “soon,” adding that many factors were being considered.
These included “the availability of other providers” and “the work that Huawei has already done in the UK,” she said.
The senior official said that London — unlike Washington — had been using Huawei technology across national systems for the past 15 years.
Security agencies believe they have managed the risk so far and will be able to do so with the 5G network, the official said.
Banning Huawei entirely could also cost “billions” of pounds and delay the rollout of 5G and full-fiber broadband, the official said.
There is also a problem in that few other firms have the technology that Huawei does.
The company provides the least expensive and most advanced alternative for super-fast data transfers behind technologies such as self-driving cars and remotely operated factory robots.
“There is a market failure here,” the official said, adding that while this could be addressed in the future, for now “we are where we are.”
The UK’s debate about Huawei has dragged on for more than a year, amid intense political turmoil over its exit from the EU.
Brexit day is now set for Jan. 31.