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Message: <blockquote data-quote="Jaysen" data-source="post: 1600" data-attributes="member: 1">Sure, I can share some thoughts.What issues would investors looking to buy shares in Saudi Aramco be concerned about?<ul> <li data-xf-list-type="ul">Will they make money investing in Saudi Aramco's shares? Oil is a volatile commodity -- what happens if we see another oil crisis and the price of oil drops? Is the company really worth 2trn? What is the future of oil?</li> <li data-xf-list-type="ul">What about the geopolitical risks? Saudi Arabia's intervention in Yemen and Saudi Arabia's role as the head of OPEC has consequences for the future of Saudi Aramco and the price of oil.</li> <li data-xf-list-type="ul">What are investors buying? The whole company or a subsidiary?</li> <li data-xf-list-type="ul">What is the ongoing relationship between Saudi Aramco and the government?</li> <li data-xf-list-type="ul">Where is Saudi Aramco going to list?</li> <li data-xf-list-type="ul">What does the due diligence reveal? What are Saudi Aramco's finances like? Will they comply with the relevant regulations of the stock market? What does the independent assessment of their oil reserves reveal? In other words: Is Saudi Aramco worth buying?</li> <li data-xf-list-type="ul">Are the right rules in place to make sure Saudi Aramco can issue shares? What does the company's constitution say?</li> <li data-xf-list-type="ul">Who makes the decisions in the company? Will the company remain secretive? Are there enough independent board members?</li> <li data-xf-list-type="ul">Can Saudi Arabia carry out its economic reform? Last year, Saudi Aramco contributed almost 40% to Saudi Arabias revenues. The future of Saudi Aramco is very much dependent on the future of the country.</li> </ul>What would Saudi Aramco be concerned about when listing shares?<ul> <li data-xf-list-type="ul">Which listing market should they choose to raise the most money?</li> <li data-xf-list-type="ul">What are the laws and regulations of that listing market? Are there alternatives?</li> <li data-xf-list-type="ul">There are litigation risks to listing in New York: terrorism laws, class action risks etc. Will they prevent a successful IPO? Or cause further problems down the line that would damage the company?</li> <li data-xf-list-type="ul">Can Saudi Arabia maintain decision making powers? What can they put in place to ensure this? They may want this both for political and national security reasons.</li> <li data-xf-list-type="ul">Can they meet the onerous New York or London listing laws? The company will need to meet onerous disclosure and financial reporting rules. If not, they will suffer serious penalties.</li> <li data-xf-list-type="ul">What about the reputational risks? As a public company, it will also need to be comfortable being open to public scrutiny. This especially matters for Saudi Arabia's reputation in the international markets. Shareholders will now have decision making powers.</li> <li data-xf-list-type="ul">Who is going to acquire their shares? The US? China? What are the consequences of that?</li> </ul>What would the Stock Exchange be concerned about?<ul> <li data-xf-list-type="ul">They want Saudi Aramco to list on their stock exchange. It sends a signal that they can attract large, complex IPOs. They also generate fees.</li> <li data-xf-list-type="ul">But does the company comply with the listing, transparency and disclosure rules?</li> <li data-xf-list-type="ul">If it doesn't comply with some, is the stock exchange willing to relax those rules? What are the consequences of those decisions? e.g. the FCA introduced new listing rules which would allow Saudi Aramco to have a premium listing on the London Stock Exchange.</li> <li data-xf-list-type="ul">Could Saudi Aramco be too big? The Saudi exchange has already introduced a mechanism to manage Saudi Aramco's size.</li> </ul></blockquote>

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