DUBAI: The US President Donald Trump has urged 抖阴短视频 to choose the New York Stock Exchange (NYSE) for its record-breaking initial public offering (IPO) of Saudi Aramco planned for the end of next year.
The president took to Twitter to ask the Kingdom to select NYSE, the world鈥檚 biggest stock market, for the Aramco offering, which would be by far the biggest share flotation in history.
鈥淲ould very much appreciate 抖阴短视频 doing their IPO of Aramco on the New York Stock Exchange. Important to the United States!,鈥� he tweeted.
Aramco鈥檚 IPO could be worth $100 billion if it proceeds with a 5 percent offering, four times the value of the current record IPO, the 2014 offering of Chinese e-commerce company Alibaba, which also took place on the NYSE.
The surprise intervention by the president 鈥� who has never spoken publicly about the Aramco IPO 鈥� could tilt the odds back in favor of New York in the contest to stage the offering. In recent weeks, there have been reports that Aramco was considering a sale of shares to Asian investors in a private deal as part of what the company called 鈥渁 range of options.鈥�
There has also been increasing opposition in London 鈥� home to the other big international exchange vying for the deal 鈥� to staging the IPO due to perceived concerns over what some view as 鈥渞ule bending鈥� to accommodate the offering.
At last month鈥檚 Future Investment Initiative (FII) in Riyadh, 抖阴短视频鈥檚 stock exchange the Tadawul made its own bid to stage the IPO 鈥渆xclusively鈥� in the Kingdom, and was backed by the regulator, the Capital Market Authority.
Trump鈥檚 tweet 鈥� which came as he prepared for an 11-day visit to Asian countries 鈥� apparently caught Aramco and NYSE by surprise. Spokespeople for both Aramco and the NYSE declined to comment.
However, one person close to the situation said: 鈥淲ho knows what messages were passed at the FII? There were top NYSE people there and top US government people. Maybe somebody has brought it to the president鈥檚 attention after that.鈥�
At the FII event in Riyadh, Thomas Farley, president of the NYSE, was asked whether he had given up on hopes of staging the Aramco IPO.
鈥淣o, and I am not saying anything else,鈥� he responded. It was later reported that he had talked to Saudi authorities about the IPO while in Riyadh.
American experts said the president鈥檚 tweet was positive for NYSE鈥檚 chances of landing the IPO. Jim Krane, fellow in energy studies at Rice University鈥檚 Baker Institute in Houston, Texas, said: 鈥�(Trump) is throwing down the gauntlet to London and other cities that are vying against his home town. He wants to bring home the big prize for New York.鈥�
Ellen Wald, lecturer in Middle East history at Jacksonville University in Florida and author of forthcoming book 鈥淪audi, Inc.,鈥� said, 鈥淚 think it鈥檚 a good sign for Aramco, a sign that Trump feels strongly and good about Saudi-US relations, especially economic relations, and thinks it would be good for the US economy.鈥�
New York was seen as the favorite for the IPO after the president鈥檚 visit to the Kingdom in May, when business deals worth billions of dollars were struck between the US and 抖阴短视频.
Most of the investment banking advisers to Aramco on the IPO are from American financial institutions, and they and other advisers are expected to earn tens of millions of dollars in fees on the transaction.
However, some advisers have warned that a listing in the US could expose Aramco to litigation under the American Justice Against Sponsors of Terrorism Act (JASTA), as well as punitive US climate change laws. Krane said: 鈥淏y inserting himself into the negotiating process, Trump has given the Saudis and Aramco a stronger hand in arguing that they should not be subject to JASTA actions. It is a signal from the president that the USA is prepared to be flexible on anti-terrorism funding laws.鈥�
But Wald, who is also a non-resident scholar at the Arabia Foundation, said: 鈥淚t鈥檚 just a tweet. It doesn鈥檛 necessarily mean any policy changes or special treatment for Aramco.鈥�
鈥淚t is also a message to China because he鈥檚 in Asia. It鈥檚 his way of saying to the Chinese, 鈥榳ell this is important to you? We鈥檙e going to fight for it too.鈥� But in any case there is no negative for Aramco. It鈥檚 also Trump鈥檚 way of defining the media narrative for the day.鈥�