Update – Saudi Aramco Shelves Its Plans for a Foreign Listing… For Now


Here in Financial Regulation Matters we have discussed the potential listing of Saudi Aramco on foreign exchanges on a number of occasions (here, here, and here). We have discussed the potential impact that this listing may have had upon the regulatory arenas within a given jurisdiction, but recently the rumours were confirmed in that Saudi Aramco has chosen to list on its own stock exchange.

The company will list on the Tadawul – Saudi Arabia’s stock market – but not in a dual-listing with another stock exchange, as New York and London had been hoping for. It has been suggested that the listing, of only 1 or 2 % of the company, will see the company valued at between $1.2 and $2 trillion, making it the most valuable company in the world. Saudi Arabia is hoping to monetise its vast fossil fuel-based reserves and this move will potentially see between $40 and $45 billion raised for the Public Investment Fund, which holds stakes in companies such as Uber. Whilst the claims that the company are, by far and away, the largest contributors to global emissions (from a company) may be true, there is no sign at all that the company, and the Kingdom, have any plans of slowing their production. The aim, for Mohammad Bin Salman, is to monetise the Kingdom’s vast reserves and move the country forward into a new era – this listing is one of the major steps in making that possible. The listing is not scheduled to take place until December and has seen a number of high-profile banks involved in the move, including Citigroup, Credit Suisse, Goldman Sachs, HSBC, JP Morgan, Merrill Lynch, and Morgan Stanley.

In terms of what to look out for, the actual valuation that the listing achieves will be fascinating, as MBS has staked a considerable portion of his reputation on achieving a $2 trillion valuation. With that now looking unlikely, and the increasing threat of terrorism looking likely to affect the value of the product, how it fares on the open market will be of interest. Also, if it does continue to publically offer slices of itself, which exchange Saudi Aramco chooses to co-list with will have massive repercussions, especially for politically-unstable markets like the UK.

Keywords – Saudi Aramco, Fossil Fuels, Business, Stock Exchange, @finregmatters

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