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JPMorgan Discusses with Saudi Firms Possible International Listings

JPMorgan Discusses with Saudi Firms Possible International Listings

Wednesday, 8 November, 2017 - 09:15
People walk by the JP Morgan & Chase Co. building in New York. REUTERS/Eric Thayer/Files

JPMorgan said it is in early talks with Saudi Arabian companies about international listings, meaning firms could join Saudi Aramco. This comes as the Saudi government plans to sell about 5 percent of Aramco of about $100 billion value, world’s largest IPO.

Chief executive of JPMorgan’s investment bank Daniel Pinto stated that Saudi companies wanting to grow and expand must have access to international capital markets which means a possibility of other Saudi international listings.

“Local companies have expressed interest to us. They are at a preliminary stage,” he said in an interview with Reuters.

This was the first time an influential banker has said Saudi firms other than Aramco could seek IPOs overseas. According to information, the IPO will be in Saudi and international markets such as New York, London, Hong Kong or Singapore which had shown interest. He explained that this might help increase the liquidity of these companies and make them attractive for international investors.

Official sources didn’t specify JPMorgan’s role in the Aramco deal but its name had been linked to the process recently.

International interest in Aramco’s IPO is on the rise and London Stock Exchange has made a “very strong case” for Aramco to list its shares in Britain.

Hours after President Donald Trump urged the king of Saudi Arabia to list in New York, spokesperson of Prime Minister Theresa May announced that London Stock Exchange is interested in Aramco.

“Obviously there are lots of big stock exchanges which have an interest in Aramco including the London Stock Exchange which we believe has made a very strong case for it being based here,” he told reporters.

When asked about Saudi Arabia’s economy in general, Pinto stated that the Kingdom is going through a massive transformation as they diversify their economy, and investors have reacted positively to this news.

He revealed that JPMorgan was considering raising its Saudi employees by 30 percent in Saudi Arabia over the next two to three years from 70 now, as business opportunities expand.

Pinto also stated that JPMorgan is currently discussing with other Gulf countries and other companies are also considering international listing.

“When you have this type of momentum, people will see the benefit of having a stock that is very liquid. Other companies in the region will probably follow,” Pinto added.

Earlier, Oman said it planned to offer shares in some state-owned energy companies to the public. Analysts and bankers have said Kuwait may also consider plans to list energy assets.

“The need to issue will still exist but be smaller next year because of higher oil prices and lower deficits and simply because so much refinancing was done this year,” Pinto said.

Dollar-denominated bond issuance from the Gulf reached about $80 billion so far this year, the highest number recorded in all of 2016, according to Thomson Reuters data.

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