Hong Kong Confident Of an Aramco Listing -- WSJ
21 March 2018 - 7:02AM
Dow Jones News
By Saumya Vaishampayan
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (March 21, 2018).
The head of Hong Kong's stock exchange said he believes Saudi
Arabian state-owned oil giant Aramco will eventually need to list
in Hong Kong, despite news that its highly anticipated initial
public offering is likely to take place on its domestic market.
Charles Li, chief executive of Hong Kong Exchanges and Clearing
Ltd., said Tuesday that while he doesn't know when Aramco will go
ahead with its IPO -- which analysts estimate could value the
company at up to $2 trillion -- the exchange continues to have
conversations with relevant stakeholders.
"If it does happen, we believe it will ultimately choose Hong
Kong," he said on the sidelines of the Credit Suisse Asian
Investment Conference in Hong Kong. Aramco "may or may not choose
Hong Kong at the time of the IPO, but Hong Kong...is one of the
markets they absolutely will need and will benefit from."
The Wall Street Journal reported Monday that Saudi Arabia is
moving ahead with a listing next year on the Saudi stock exchange
only, while taking more time to decide whether an international
venue is worthwhile. Saudi officials say a listing in Hong Kong
remains in contention, provided China becomes a cornerstone
investor in the company.
Major exchanges around the world are vying to win IPOs -- like
the potential Aramco deal -- at a time when many highly valued
companies are choosing to stay private for longer periods of time.
Hong Kong's stock exchange is advancing a plan that would allow
companies to float -- even if they have structures that restrict
ordinary shareholders' voting rights and give their founders
greater voting power.
In a speech at the conference, Mr. Li addressed the potential
for China to let foreign-listed companies issue depositary receipts
so they can be traded on mainland Chinese stock markets.
The issuance of depositary receipts would allow buzzy technology
giants like Alibaba Group Holding Ltd. and Tencent Holdings Ltd. to
bypass current Chinese law prohibiting firms incorporated overseas
from going public in mainland China.
Everybody is "waiting for the rules to come out to see exactly
how it's going to work," he said, adding that was too soon to tell
how big an impact any changes would have on markets.
The broadest change could come if new rules lead to the adoption
of foreign practices in the Chinese market, which probably won't
happen right away, he said.
"If that happens, the domestic market is a very different
market," he added.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
(END) Dow Jones Newswires
March 21, 2018 02:47 ET (06:47 GMT)
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