Trump may Widen Rift With saudi arabia
The ipo of Saudi Aramco in 2018 is expected to bring in an all-time high in fees for investment banks that help the oil company go public, a major payday for Wall Street. however the election of Donald Trump as well as a key piece of legislation that has offended saudi arabia may lead to Aramco taking its ipo somewhere else besides the new york stock exchange.
The Wall Street Journal reports that many senior Saudi officials are reassessing not just the Aramco ipo, however broader investments in the U.S. as a result of the shifting political winds. Earlier this year, the U.S. Congress passed legislation that allowed the victims of 9/11 families to sue saudi arabia for its supposed role in the terrorist attack. President Obama vetoed the legislation, however Congress overrode his veto, even though shortly afterwards some members of Congress regretted having done so.
Saudi Arabia vehemently opposed the bill. Since its passage, the Saudi sovereign wealth fund has frozen investments in the U.S. till they assess the implications of the legislation.
The ipo of Saudi Aramco are massive by any measure. Saudi officials believe that Aramco may be worth $2 trillion, so even taking simply 5 % of the company public may bring in as much as $100 billion. It may also hand U.S. investment banks $1 billion in fees, which would set a record. The new york stock exchange was the obvious choice for Aramco’s listing, however currently Saudi officials are reconsidering alternative locations as they lose confidence in their political ally in Washington.