Expert Says New York Out of Race for Aramco IPO Listing

Expert Says New York Out of Race for Aramco IPO ListingExpert Says New York Out of Race for Aramco IPO Listing

A few days after US President Donald Trump made a high-profile pitch for Saudi Aramco to list on the New York Stock Exchange, prominent investor Mark Mobius said the city is "pretty much out" of the running.

A number of exchanges, including those in New York, London, Hong Kong and Singapore, are gunning for the initial public offering of Saudi Arabia's state oil company—estimated to be one of the most valuable companies in the world.

Aramco has said it will float its shares on the local Saudi exchange, Tadawul, and another one or two overseas markets in the second half of 2018, CNBC reported.

"I think New York is pretty much out because of the risk that they have litigation. London may be out too because they don't want to disclose a lot of the inner workings of Aramco, so it's going to be very interesting to see what happens with that deal," Mobius, the executive chairman of Templeton Emerging Markets Group, said on Friday.

A Financial Times report in June said lawyers warned Saudi Arabia that a New York listing posed "the greatest litigation risk of any jurisdiction". Reuters followed up with a report in August that the Middle Eastern kingdom still favored New York despite the risks.

Trump on Sunday tweeted that it was "Important to the United States!" that Aramco float its shares on the New York Stock Exchange.

But Mobius said the decision, a closely-watched one amid the anti-corruption drive and political purge in Saudi Arabia, seems to still be up in the air.

He added that a "full and fair disclosure" will be key for Aramco to attract investors, including his firm Templeton.

"Disclosure is really the key," he said. "Of course, it could be quite exciting. It could be one of the most exciting companies listed ... but they have to disclose what's going on, what are the inner workings and also what will be the decisions regarding earnings because a big part of their earnings go to the government."

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