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