Hong Kong in running to host world’s biggest IPO after regulators met Aramco executives

Hong Kong sealed its place among the front-runners to host the biggest initial public offering in history after oil giant Saudi Aramco sent its executives to talk with local regulators, according to Carlson Tong Ka-shing, chairman of the Securities and Futures Commission.

“Saudi Aramco executives visited Hong Kong last month to meet with the SFC and stock exchange executives to understand about the listing regime here,” Tong said on Thursday at a media gathering.

“The SFC fully supports the government and the stock exchange to attract Aramco to list here and will provide all the support it needs.

“Hong Kong is an ideal place for Aramco to list as it is a state-owned oil company in Saudi Arabia.

Hong Kong has a good track record and we have had the whole set of listing rules for many mainland state-owned oil companies to list here for a long time.

“When compared with other markets, we have more experience in handling many technical issues related to state-owned companies’ IPOs, including disclosure issues and other transaction regulations.”

Tong said if Saudi Aramco decided to list in multiple markets, then Hong Kong would have a better chance of sharing a slice of the mega listing, which is expected to raise US$100 billion, the biggest sum ever raised through IPO. That estimate is based on expectations that Aramco will offer 5 per cent of its equity, valuing the company at about US$2 trillion

Besides Hong Kong, London and New York are also said to be in the running.

Charles Li Xiaojia, chief executive of Hong Kong Exchanges and Clearing, wants to see Beijing allow mainlanders to subscribe to listings in Hong Kong via an IPO connect scheme in time for Aramco’s debut. He believes it would be an additional incentive for the oil leviathan to choose Hong Kong.

Tong said the IPO connect scheme is a good idea but it would need State Council approval, which could take a long time.

“If mainlanders were allowed to subscribe to the Aramco IPO, it would increase the chances of other oil companies choosing to list here,” he said.