Want to know where the biggest deal in the history of capital markets is going to land? Well, it probably won't be here at the New York Stock Exchange. It probably won't be in London either. Look to Hong Kong. I'm Rob Cocks, Reuters Breaking Views editor, based in New York.
Next year, Saudi Arabia has to decide where it's going to list the largest corporation in the world, Saudi Aramco, it's the national oil company. The crown prince of Saudi Arabia wants it to be worth $2 trillion. But beyond the numbers, he's got to figure out which stock exchange is going to be best suited for a listing.
New York is in the running, but it may not be perfect for a couple of reasons. One of them is the Justice Against Sponsors of Terrorism Act. This actually opens up the Saudi government to a potential lawsuit by all of the victims, or many of the victims, from 9/11.
So, that's a problem. If you list here, there could be a claim against those assets. London Stock Exchange has a different problem. One is, the listing standards may not allow them to choose London. The other problem is that the Saudi government is in this big dispute and this fight with the Qatari government.
As a result, it may not favor putting its biggest company on the London Stock Exchange, given that the Qataris own something like 10% of the London Stock Exchange. All of which brings us across the Pacific, to Hong Kong. Hong Kong offers a couple of advantages over New York and London.
One, that Hong Kong Exchange is quite willing to change its listing rules and some of its disclosure requirements, that might suit the Saudis. The other is money. There's just so much money onto on shore in China that's willing, and would love to come off shore. And the Hong Kong Exchange is working with the Beijing government to create this connect, which allows for private money in China to flow out of China and to Hong Kong, potentially for IPOs, including the Saudi around holistic.