Launching the Saudi Aramco initial public offering (IPO) on Hong Kong stock exchange (HKEx) would be a “match made in heaven,” Charles Li, CEO of HKEx, told CNBC.
The expected listing of the Saudi oil and gas company is predicted to be the world’s largest initial public offering ever.
Saudi Arabia is aiming to sell as much as 5 percent of Saudi Aramco with listings on both the Saudi stock exchange and at least one international market, Reuters reported recently, adding that the sale was expected to raise as much as $100 billion.
That’s set off a horse race among global stock exchanges, with commentators naming a variety of cities — including Hong Kong, Singapore, New York, Toronto, London and Tokyo — as potential locations for the listing.
But HKEx’s Li said his exchange offered a “unique” value for the company.
“We do bring very unique, very competitive proposition and value to that, both in terms of Hong Kong being an English common law jurisdiction, widely accepted by anybody as a listing venue with the most friendly and robust regulatory system,” Li said. “We are also very much an international market and operate completely under international law.”
Li added that HKEx can provide access to investors in mainland China via the Shenzhen-Hong Kong stock connect and the Shanghai-Hong Kong stock connect.
“Through Connect, we potentially can bring very substantial Chinese demand onshore into a very large IPO,” Li said. That would link “the most important energy company and investors from the largest energy consumption countries. That is indeed a match made in heaven.”
Hong Kong Exchanges and Clearing reported net profit fell 27 percent to HK$5.8 billion ($747.6 million) in 2016 from a year ago, as trading volumes declined from 2015. That was below analysts’ average estimate of HK$6 billion, according to Thomson Reuters data.