The London Stock Exchange (LSE) has a “strong case” for attracting the mega-float of part of state-backed oil giant Saudi Aramco, 10 Downing Street said today.
A spokesperson for the Prime Minister said: “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”, according to Reuters.
The comments come after US President Donald Trump sent a hopeful tweet on Saturday night saying gaining the listing for the New York Stock Exchange is “important to the United States”.
Would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock Exchange. Important to the United States!— Donald J. Trump (@realDonaldTrump) November 4, 2017
New York and London are widely seen as the main contenders for the listing, alongside Saudi Arabia’s own Tadawul exchange, with Hong Kong also thought by some to have an outside chance.
The Saudi government plans to list five per cent of the company with a hoped-for valuation of $2 trillion (£1.5 trillion), which would make it the largest firm in the world by market capitalisation.
The government has made considerable efforts to secure the listing, with Prime Minister Theresa May accompanying LSE chief executive Xavier Rolet to Riyadh, the Saudi capital, in April.
City regulators at the Financial Conduct Authority (FCA) are also deciding on a plan to loosen listing rules for state-owned enterprises, in an effort to woo the Saudi government.
Investor and corporate governance groups were outspoken in their responses to an FCA consultation on the plans, saying allowing weaker governance standards would weaken the UK’s reputation for institutional strength.
However, the UK may also benefit from differences in legal culture: there is a lower bar to jump to bring legal action in the US.