LONDON: The British investment community could not afford to miss out on the opportunity offered by a multibillion-dollar flotation of Saudi Aramco on the London Stock Exchange (LSE), despite reservations in some quarters about corporate governance and shareholder protection.
Aramco — officially estimated as being worth $2 trillion — is considering global stock market locations as part of the plan for a sale of some of the company in 2018. It is part of a wider privatization drive as part of the Kingdom’s strategy of economic diversification.
London and New York are believed to be rivals for the Western listings in the Aramco initial public offering (IPO).
The UK financial authorities are considering setting up a new type of listing category for companies owned by sovereign governments that want to pursue an IPO in London on the “premium” part of the market. If it gets approved, it could attract Aramco and other government-owned entities from the Arabian Gulf and elsewhere.
While some investment experts have criticized the new proposals as weakening the corporate governance culture of the UK, many believe the City of London has to attract new business in the wake of the UK vote to leave the EU, which could hit traditional revenue streams in what is regarded as the premier financial marketplace in Europe.
David Buik, veteran market commentator at investment house Panmure Gordon, said: “The UK is a little short of friends, and there is no reason why London should not be part of the Aramco float. To get this away in London would show that the LSE is the place where such global listings should be done.”
That view was echoed by others in the City. David Ramm, corporate partner in the London office of global law firm Morgan Lewis, said: “Post-Brexit, London needs to maintain its international reach and network and show it is back to ‘business as usual.’ The financial infrastructure is already there to support it as a global market. A listing the size of Aramco would emphasize the size and importance of London as a financial center.”
Others warned however that the City authorities and Aramco would have to get the listing proposals just right to ensure a successful IPO and after-market in London. When the sovereign listing proposals were first suggested, Chris Cummins, the chief executive of the Investment Association, a trade body that represents investment managers, said: “The (financial authorities) are consulting on removing key investor protections from the premium-listing segment to accommodate sovereign. Investors believe a premium listed segment without these investor protections is not a premium segment, and would not provide the protection that investors expect.”
Concerns center around the fact that only 5 percent of Aramco would be listed, leaving investors as minority shareholders in a company dominated by the Saudi government.
Ramm said: “Regarding minority protection, any company listing in London would still have to comply with the ongoing regulatory obligations. London has some of the best corporate governance practices in the world.”
Crucial for the chances of success in London is the valuation and the dividend policy. Buik said: “Investors are much more savvy now and they want to show some profit. A $2 trillion valuation might be ambitious. What level of dividend Aramco intends to pursue will be very important in deciding investor sentiment.”
Critics of the new sovereign proposals point to the experience of Eurasian Natural Resources Corporation (ENRC), a Kazakhstan company that had to delist in 2013 after six years on the LSE during which serious governance issues emerged.
“London has certainly learned to be more rigorous in enforcement,” Ramm said.
One investment banker with experience in Gulf markets, who did not want to be identified, said a successful listing for Aramco in a “sovereign” category could open up a whole new investment segment in global markets.
“It’s not just Aramco. The Saudi government is committed to a $200 billion privatization program, that could also go to London. And there are lots of government-owned entities in the UAE and elsewhere in the region that might want to raise cash on the London market. It could make sovereigns investible in a way they are not at the moment.”
Some advisers to Aramco fear that a listing in New York would open up the doors to expensive litigation. Ramm said: “There is a shareholder litigation culture in the US that is not present in the UK, so London is a safer jurisdiction in many ways.”
London, in need of financial friends, would welcome Aramco
London, in need of financial friends, would welcome Aramco
World must prioritize resilience over disruption, economic experts warn
- Al-Jadaan said that much of the anxiety dominating markets reflected a world that had already been shifting for years
- Pointing to Asia and the Gulf, Al-Jadaan said that some countries had already built models based on diversification and resilience
DAVOS: Saudi Arabia’s Finance Minister Mohammed Al-Jadaan urged policymakers and investors to “mute the noise” and focus on resilience, as global leaders gathered in Davos on Friday against a backdrop of trade tensions, geopolitical uncertainty and rapid technological change.
Speaking on the final day of the World Economic Forum in Davos, Al-Jadaan said that much of the anxiety dominating markets reflected a world that had already been shifting for years.
“We need to define who ‘we’ are in this so-called new world order,” he said, arguing that many emerging economies had been adapting to a more fragmented global system for decades.
Pointing to Asia and the Gulf, Al-Jadaan said that some countries had already built models based on diversification and resilience. In energy markets, he pointed out that the focus should remain on balancing supply and demand in a way that incentivized investment without harming the global economy.
“Our role in OPEC is to stabilize the market,” he said.
His remarks were echoed by Saudi Arabia’s Minister of Economy and Planning Faisal Alibrahim, who said that uncertainty had weighed heavily on growth, investment and geopolitical risk, but that reality had proven more resilient.
“The economy has adjusted and continues to move forward,” Alibrahim said.
Alibrahim warned that pragmatism had become scarce, trust increasingly transactional, and collaboration more fragile. “Stability cannot be quickly built or bought,” he said.
Alibrahim called for a shift away from preserving the status quo towards the practical ingredients that made cooperation work, stressing discipline and long-term thinking even when views diverged.
Quoting Saudi Arabia’s founding King Abdulaziz Al-Saud, he added: “Facing challenges requires strength and confidence, there is no virtue in weakness. We cannot sit idle.”
President of the European Central Bank Christine Lagarde stressed the importance of distinguishing meaningful data from headline noise, saying: “Our duty as central bankers is to separate the signal from the noise. The real numbers are growth numbers not nominal ones.”
Managing Director of the IMF Kristalina Georgieva echoed Lagarde’s sentiments, saying that the world had entered a more “shock prone” environment shaped by technology and geopolitics.
Director General of the World Trade Organization Ngozi Okonjo-Iweala said that the global trade systems currently in place were remarkably resilient, pointing out that 72 percent of global trade continued despite disruptions.
She urged governments and businesses, however, to avoid overreacting.
Okonjo Iweala said that a return to the old order was unlikely, but trade would remain essential. Georgieva agreed, saying global trade would continue, albeit in a different form.
Georgieva warned that AI would accelerate economic transformation at an unprecedented speed. The IMF expects 60 percent of jobs to be affected by AI, either enhanced or displaced, with entry-level roles and middle-class workers facing the greatest pressure.
Lagarde warned that without cooperation, capital and data flows would suffer, undermining productivity and growth.
Al-Jadaan said that power dynamics had always shaped global relations, but dialogue remained essential. “The fact that thousands of leaders came here says something,” he said. “Some things cannot be done alone.”
In another session titled Geopolitical Risks Outlook for 2026, former US Democratic representative Jane Harman said that because of AI, the world was safer in some ways but worse off in others.
“I think AI can make the world riskier if it gets in the wrong hands and is used without guardrails to kill all of us. But AI also has enormous promise. AI may be a development tool that moves the third world ahead faster than our world, which has pretty messy politics,” she said.
American economist Eswar Prasad said that currently the world was in a “doom loop.”
Prasad said that the global economy was stuck in a negative-feedback loop and economics, domestic politics and geopolitics were only bringing out the worst in each other.
“Technology could lead to shared prosperity but what we are seeing is much more concentration of economic and financial power within and between countries, potentially making it a destabilizing force,” he said.
Prasad predicted that AI and tech development would impact growing economies the most. But he said that there was uncertainty about whether these developments would create job opportunities and growth in developing countries.
Professor of international political economy at the University of New South Wales in Australia, Elizabeth Thurbon, said that China was driving a Green Energy transition in a way that should be modeled by the rest of the world.
“The Chinese government is using the Green Energy Transition to boost energy security and is manufacturing its own energy to reduce reliance on fossil fuel imports,” she explained.
Thurbon said that China was using this transition to boost economic security, social security and geostrategic security. She viewed this as a huge security-enhancing opportunity and every country had the ability to use the energy transition as a national security multiplier.
“We are seeing an enormous dynamism across emerging market economies driven by China. This boom loop is being driven by enormous investments in green energy. Two-thirds of global investment flowing into renewable energy is driven largely by China,” she said.
Thurbon said that China was taking an interesting approach to building relationships with countries by putting economic engagement on the forefront of what they had to offer.
“China is doing all it can to ensure economic partnership with emerging economies are productive. It’s important to approach alliances as not just political alliances but investment in economy, future and the flourishment of a state,” she said.
The panel criticized global economic treaties and laws, and expressed the need for immediate reforms in economic governing bodies.
“If you are a developing economy, the rules of the WTO, for example, are not helpful for you to develop. A lot of the rules make it difficult to pursue an economic development agenda. These regulations are not allowing the economies to grow,” Thurbon said.
“Serious reform must be made in international trade agreements, economic bodies and rules and guidelines,” she added.
Prasad echoed this sentiment and said there was a need for national and international reform in global economic institutions.
“These institutions are not working very well so we can reconfigure them or rebuild them from scratch. But unfortunately the task of rebuilding falls into the hands of those who are shredding them,” he said.
WEF attendees were invited to join the Global Collaboration and Growth meeting to be held in Saudi Arabia in April 2026 to continue addressing the complex global challenges and engage in dialogue.
