With oil prices on the uptrend, investors are keeping a close watch on the oil giants of the Middle East — especially Saudi Arabia’s leaders. Over the weekend, the world's most valuable oil company tipped its hand on a multi-billion dollar deal that may land in Singapore.
Saudi Aramco is looking to sell as much as a US$50 billion ($67 billion) stake, or 2.5% of the company, and has held talks on selling the additional shares on the Riyadh stock exchange and a secondary listing, possibly in London or Singapore, reported The Wall Street Journal on Feb 4.
The listing of shares would mark the largest in the history of capital markets, breaking a record set by the company itself. Aramco was behind the world’s largest initial public offering in 2019 when it raised US$29.4 billion on the Saudi stock exchange. Even so, the record-smashing IPO listed just 1.5% of the company, a scaled-back iteration of the original plan to list 5% of the company for up to US$100 billion.
Both Aramco and the Singapore Exchange (SGX) have so far declined to comment on the WSJ report.
The secondary listing has been on the table for years. Reuters first reported in February 2017 that SGX has held talks with Aramco. Then, the other bourses being considered were New York, London, Hong Kong and Japan. With this weekend’s update, perhaps only Singapore and London remain on the cards.
Aramco plans to complete the share sales by end 2022 or early-2023, reports WSJ, with the plan being pushed by the crown prince himself. In April 2021, Prince Mohammed said in a televised interview that the kingdom was in talks with unnamed foreign investors about selling stakes in Aramco, with options that included a 1% acquisition by a leading global energy company. Plans under deliberation included selling more shares in Riyadh and that an announcement would come in a year or two, notes the report.
See also: SGX CEO vague on potential Aramco listing, but says Singapore is 'well-positioned'
SGX a ‘very viable pillar’
The talk surrounding Aramco comes as SGX CEO Loh Boon Chye reiterates the bourse’s embrace of dual listings.
SGX can be a “very viable pillar” for companies seeking a dual listing in an Asian timezone, said Loh at a media briefing on Feb 4, ahead of SGX’s 1HFY2022 results release.
See also: 'China's Tesla' Nio mulling SGX secondary listing
A secondary listing on SGX will give these companies “24-hour liquidity across a global investor pool”, he added.
This follows a recent report by the International Financing Review that leading electric vehicle (EV) maker Nio is exploring a secondary listing on SGX. The China-based company has been listed on the New York Stock Exchange since 2018.
While Hong Kong is the favoured listing for these “home-coming” companies, SGX is positioned as a “neutral” location with good access for the international investment community as well.
Said Loh: “With the initiatives that we've done in the last two years, whether that is investor outreach, regional retail market makers, interagency initiatives and our Spac frameworks, we're really now seeing a few pockets of clear interests.”
“Dual listing is really one of a very viable capital raising options for companies and SGX does provide a conducive platform with a wide and complementary pool of investors for some of these companies,” he added.
Last September, the Singapore government co-invested $1.5 billion with Temasek Holdings, establishing the Anchor Fund @ 65. The fund will support high-growth enterprises eyeing an IPO, including secondary and dual listings on the SGX.
Photo: Bloomberg
