London ‘venue of choice’ for Middle East listings

LONDON: The London Stock Exchange (LSE) regards itself as the “undisputed overseas listing venue of choice” for companies from the Middle East, according to senior officials.
The presence of its chief executive Xavier Rolet on a high-level state visit to Saudi Arabia earlier this year was the clearest sign yet that the LSE wants to be one of the markets on which shares in Saudi Aramco are listed next year.
Ibukun Adebayo, the LSE’s head of Middle East, Africa and south Asia in the LSE’s international markets unit, said: “The LSE provides companies from the region with very significant opportunities, and access to our pools of dedicated investors from the US and Europe, and some of the largest pension and insurance houses, professional investment managers and sovereign wealth funds.”
Although no details of Rolet’s visit were disclosed when he visited the Saudi Stock Exchange — known as the Tadawul — with British Prime Minister Theresa May in the spring, one person who accompanies the party said: “Of course, he made it apparent that LSE would like to be a home for Saudi Aramco. He told them it would be good for Saudi Arabia and for London to form the Western venue for the listing.”
In addition to the Tadawul, Aramco is believed to be considering at least one other venue in Western markets, with the New York Stock Exchange (NYSE) another obvious contender.
It is also thought to be looking at an Asian market, with Tokyo and Hong Kong as top rivals for a chunk of the IPO, which is expected to be worth around $100 billion if 5 percent of the company is floated at the official valuation of $2 trillion.
Aramco would be the first Saudi company to have a “premium” listing on the LSE were it to list on that market. Kingdom Hotel Investments had a secondary listing there, and the LSE says there are 37 companies from the Middle East and North Africa with an LSE listing of some sort, for a total combined market capitalization of $65 billion.
Earlier this year, Dubai-based oil and gas production services company ADES International Holding raised $170 million via a listing on the LSE main market. Two UAE health companies, NMC Health and Al Noor, have also conducted successful IPOs in London.
Listing on the London exchange has not always been a smooth ride for Arabian Gulf companies. DP World, the Dubai-based ports operator, had a dual listing in London and the UAE for some time, before canceling the London listing because of a lack of investor interest.
Damac, the Dubai based real estate developer, carried out a London IPO of shares in global depository receipt (GDR) form, before delisting and moving all its share trading to the Dubai Financial Market.
The LSE has been broadening its range of product offerings for corporates in the Middle East and Africa. Earlier this year it listed the first ever “green bond” — an instrument to invest in environmentally sound projects — with a $587 million issue on behalf of National Bank of Abu Dhabi.
It was also the venue for a $1.25 billion sukuk, or Shariah-compliant bond, issued by the Islamic Development Bank last April.