Aramco's IPO retreat
The Wall Street Journal has the latest evidence that Saudi Arabia is delaying and potentially scaling back plans for the IPO of state oil giant Aramco. The paper reported yesterday that the Saudis will move ahead next year with a listing only on their domestic exchange, called the Tadawul, while "taking more time to decide if an international venue is worth it."
The intrigue: The WSJ story arrived on the eve of President Trump's meeting today with Crown Prince Mohammed bin Salman. Trump has urged the Saudis to select the U.S. as the international venue for what could be the largest IPO ever.
The U.S. might be out of the running. Here's a key line from the WSJ...
- "Crown Prince Mohammed bin Salman, who runs the day-to-day affairs of the oil-rich kingdom, has become resigned to the idea that the legal risks of a U.S. listing could be insurmountable."
One level deeper: A new post at the Council on Foreign Relations points out that pursuing a Tadawul-only listing carries its own risks.
- "[O]ne of the biggest concerns about a Saudi Aramco listing on the Saudi exchange is the lack of liquidity due to the Tadawul’s size," write Amy Myers Jaffe and Jareer Elass, noting it's vastly smaller than the New York Stock Exchange and other big foreign exchanges.