Sep 9, 2019 - Economy

J.P. Morgan takes the lead as top adviser for Saudi Aramco IPO

Data:; Chart: Axios Visuals
Data:; Chart: Axios Visuals

J.P. Morgan Chase is close to winning the lead advisory role for state-owned oil company Saudi Aramco's IPO, which is expected to be the largest ever at $25 billion. A final decision is expected next week, CNBC reports, citing inside sources.

What's happening: Saudi authorities reportedly plan to sell 5% of Aramco’s shares on the local Tadawul stock exchange and launch another, much larger, offering in a foreign market in the next 2 years.

  • Rumors have swirled about which location will get the much larger listing, with Tokyo most recently reported as the favored destination.
  • The exchange's CEO promised last year shares of Aramco listed on the Tadawul would be limited so as not to overwhelm the $500 billion bourse with Aramco's $2 trillion market value.

Of note: The Tadawul was recently incorporated into MSCI's emerging markets index, which has brought billions of dollars to the exchange so far this year.

  • From the start of 2019 through the end of July, foreign investors have accounted for 21% of total trading, reaching $56 billion, according to an August exchange filing.
  • The Saudi index had risen nearly 20% at its peak in May, Reuters reported.
  • However, the index has seen a steep slide since, due to geopolitical worries and the trade war, and is up 2.5% year-to-date.

Go deeper: Saudi Arabia's oil minister is out in a major shake-up

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