'As Saudi Arabia makes a geo-economic pivot to the East, a Tokyo listing for Aramco would factor into a grander strategic agenda which Riyadh is pursuing in Asia.' Opinion | GiorgioCafiero
Saudi Arabia appears to be accelerating its plans for an initial public offering for the Kingdom’s state-owned oil giant, Aramco. The
Undoubtedly, a Tokyo listing for Aramco would mark a major disappointment to the other venues—New York, London, and Hong Kong—that Aramco is considering. Yet deciding to go with the Tokyo Stock Exchange instead of these other options could make much sense for Aramco given several risks in play.: “Aramco is looking for long-term stable buyers—preferably of the quiet, less litigious kind. That describes Japanese investors very well.
Unclear is whether Aramco could ever be offered sovereign immunity in the US to protect the company from lawsuits. Thus, by presenting Tokyo as less risky and requiring much less in terms of disclosure compared to other options that Aramco has considered for its overseas IPO, the Japanese may successfully sell the Tokyo Stock Exchange as the most attractive venue.
Ultimately, whether the Saudis are serious about the Aramco IPO or are just using such prospects as a means of enhancing political leverage remains an open question. Nonetheless, Riyadh’s revival of this IPO shines further light on the role of Japan—an economic powerhouse that has the world’s fourth-largest economy—in Saudi Vision 2030., the Saudi leadership views Japan as having a crucial role to play in terms of helping the Kingdom diversify its economy away from the oil sector.
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