Trump urges Saudi Aramco to list on the NYSE

Attendees huddle around a laptop computer as they sit below a Saudi Arabian Oil Co. (Aramco) sign, inside the King Abdulaziz Center for World Culture during a tour of the project in Dhahran, Saudi Arabia, on Friday, Nov. 25, 2016. Photographer: Simon Dawson/Bloomberg

President Donald Trump personally lobbied Saudi King Salman to list the Saudi Arabian Oil Co. on the New York Stock Exchange during a phone call between the world leaders on Saturday, according to a readout provided by the White House.

The call, which came as the president flew from Honolulu to Tokyo, followed the president tweeting his hope that the listing would occur on a U.S. exchange, raising the political stakes for what would be the largest initial public offering.

“Important to the United States!” Trump said in the Twitter post from Honolulu early Saturday.

Trump’s tweet, sent hours before he was set to depart for an 11-day tour of Asia, came out of the blue for Aramco, according to a person familiar with the company, who asked not to be named. But the move is consistent with a growing push by American regulators to lure companies to U.S. stock exchanges.

Trump told reporters aboard Air Force One after the call that he was motivated to send the tweet because the Aramco IPO “will be just about the biggest ever” and the U.S. wants “to have all the big listings.” The Saudis were not currently looking at listing on a U.S. exchange “because of litigation risk, and other risk, which is sad,” he said.

‘Energy Geopolitics’

“I want them to very strongly consider the New York Stock Exchange or NASDAQ or frankly anybody else located in this country,” Trump said.

The tweet was “energy geopolitics in action,” said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University and a former senior oil official in the Obama administration.

“At a time when the Saudis are looking for the U.S. to get tougher on Iran, the Saudi-Russian relationship is warming, the Saudis are trying to attract international private capital, and the Chinese are rumored to be considering taking a piece of Aramco, Trump’s personal plea to list in N.Y. raises the diplomatic stakes of Aramco’s decision.”

A spokesperson of Saudi Aramco declined to comment, as did Kristen Kaus, a spokeswoman for the  Intercontinental Exchange Inc.-owned NYSE.

$100 Billion

The Aramco IPO could be the world’s largest, with the Saudi government hoping to raise $100 billion selling just 5 percent of the company. It is the centerpiece of Crown Prince Mohammed bin Salman’s “Vision 2030” reform plan, intended to diversify the kingdom’s economy and invest more heavily in infrastructure.

Although analysts and industry executives have said that figure is probably too high, even if Aramco raises half of it, it will be still double the current largest IPO, the $25 billion raised by Chinese group Alibaba Group Holding Ltd. in 2014.

While other politicians including British Prime Minister Theresa May and Japanese Prime Minister Shinzo Abe have lobbied Riyadh to attract Aramco to their domestic exchanges, Trump’s tweet is so far the most public call to Riyadh.

Prince Mohammed is currently deciding where to stage the offering. Choosing New York in addition to Tadawul, the Saudi exchange, could boost the longstanding strategic alliance between the two countries. Lawyers and bankers working on the IPO had concerns about a New York listing, however, in part due to to strict regulations about oil-reserves disclosure, accounting rules and the potential for litigation.

On top of that, Saudi Arabia has vehemently complained about a U.S. law passed in September 2016 that allows families of the Sept. 11, 2001, terror-attack victims to sue the kingdom.

Overcoming Barriers

In late October, Saudi Finance Minister Mohammed Al-Jadaan became the first senior official to openly discuss the possibility of forgoing the international part of the IPO. And Khalid Al Hussan, chief executive officer of Tadawul, said the Saudi exchange had the “ aspiration” to handle the listing alone.

Ali Shihabi, executive director of the Arabia Foundation think tank in Washington, said in a Twitter post Saturday that barriers to a U.S. listing could be overcome. “If the US govt/congress can grant Aramco sovereign immunity on the NYSE then may be possible,” he wrote.

Trump’s focus on capital markets was a change from his usual targeting of political foes. But back in December, when Trump interviewed U.S. Securities and Exchange Commission Chairman Jay Clayton for the job, the then-president elect was fixated on the steep decline in U.S. IPOs, people familiar with their discussion have said.

As an attorney working in private practice, Clayton’s career highlights as a deals lawyer include working on Alibaba’s IPO. Since taking over as SEC chair in May, Clayton has said bolstering U.S. capital markets is among his top priorities. In September, he said he was “troubled” many companies were choosing not to go public. The SEC is Wall Street’s main regulator and oversees the NYSE and other exchange operators.

Bloomberg

Singapore Reporter/s

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.