Trump Tweets U.S. Interest for Aramco IPO, but can the NYSE Compete?

President Donald Trump used his Twitter account to encourage Saudi Arabia to list shares of Saudi Aramco on the New York Stock Exchange (NYSE) as markets around the world compete for the sought-after listing.

“Would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock Exchange. Important to the United States!” 

Trump has frequently used Twitter to comment on political and social issues, and communicate his policies to his followers and media outlets. The President’s plea is a public effort to coax Saudi Arabia to choose the NYSE over other markets in the running for the IPO. However, since announcing that it would do an IPO as part of its Vision 2030 reform plans, Saudi Arabia has kept its options open. It is possible that Saudi Aramco will not list shares publicly after it was reported that it may take a direct investment in the company, or that it may list the company, but locally on the Tadawul, Saudi Arabia’s stock market.

President Trump in Saudi Arabia.

President Trump in Saudi Arabia.

In October, the Tadawul’s Chief Executive said he would like to stage Saudi Aramco’s initial public offering (IPO) on its own exchange, rather than be part of a global offering with other markets. Khalid Al-Hussan told the Financial Times on the sidelines of the conference that he wanted the exchange to be the “exclusive” listing venue for an Aramco IPO. “Our aspiration for Tadawul, as the main exchange in the region, is to be the exclusive venue for Aramco. We are doing what it takes to make sure Aramco is listed here (in Saudi Arabia) only. We aim and work hard to be the exclusive listing venue,” he said.

Should Aramco choose an international listing, it would consider whether the listing rules would be able to handle key Saudi conditions of what many believe will be the largest IPO ever. The NYSE will not adjust its rules to accommodate the Aramco IPO, while other indices like London’s stock exchange has made some rule changes to entice the listing.

“Big question is what the US is willing to do to lay out the red carpet” for Saudi decision makers, Reuters journalist Katie Paul said on Twitter, who noted that London is tweaking its own listing rules “to try to snag the Aramco IPO.”

Trump, who made Saudi Arabia his first international visit and used the occasion to announce billions in U.S.-Saudi deals, has embraced the Kingdom as a key ally and trading partner. He also supported the Kingdom’s crackdown on corruption. 

In addition to NYSE rules, another major roadblock to the listing of Saudi Aramco could be the controversial JASTA bill that withstood President Obama’s veto and passed in Congress in 2016.

Meanwhile, a cloud has settled in on Trump’s presidency as the FBI continues to investigate and prosecute Russian meddling in the U.S. election and alleged felony corruption and conspiracy charges against Trump’s former campaign manager, Paul Manafort, and others. 

Crown Prince Mohammed bin Salman, in an interview with Reuters last month during the Future Investment Initiative conference, reiterated that the IPO would happen in 2018. “We are on track in 2018… but the listing (details) are still under discussion…It will be IPO-ed in 2018.”

“I know that there has been a lot of argument around this topic but at the end of the day the right say is that of the investor. Undoubtedly the biggest IPO in the world must be accompanied by a lot of rumors,” Prince Mohammad said.