UK regulators would be wrong to give in to intense lobbying and give the oil giant fast-track entry to the FTSE 100
Roll up, roll up, who wants some lovely Saudi dosh that would arrive with a stock market listing in London of Saudi Aramco, the enormous state-owned national oil company? Almost every investment banker and corporate lawyer in town, obviously. Aramco, if it is really worth about $2tn (£1.5tn), would be the world’s biggest flotation. The advisory fees would keep rolling in for decades because, once a firm has settled on a foreign stock exchange, it tends to stick around.
That is why there is an intense lobbying effort to persuade City regulators that, to sweeten the appeal of London over New York, Aramco should be given fast-track entry to the FTSE 100 index even though the Saudi regime seems to have no intention of meeting one of the basic qualifying criteria. Only a 5% slice of Aramco would be sold to outsiders, it is reported, whereas the rules state that at least 25% of the shares must be in public hands to be a so-called “premium” listing. The Saudis seem to fancy the “premium” label and prestige of FTSE 100 status, but don’t like the obligations that would go with them.