Hong Kong bourse vies to win part of Aramco listing

Hong Kong’s stock exchange is vying to attract the $100 billion listing of Saudi Arabian Oil Co. (Saudi Aramco), backed by its role as a gateway to China's rich investors, Reuters reported on Monday, citing Charles Li, the chief executive of Hong Kong Exchanges and Clearing (HKEX).

Local banks like the Industrial and Commercial Bank of China International and China International Capital Corporation are also pitching for an advisory role in the planned initial public offering (IPO).

"For an IPO of that scale, it makes perfect sense to potentially be accessible by the very large capital base and investment wealth onshore in China," Li said during an earnings briefing.

Discussions had been earlier held with the Saudi oil giant, and the HKEX is working "very hard" to snag what is expected to be the world's biggest ever IPO, Li added, without giving more details on any potential concessions by Hong Kong for the deal.

Li's comments during Saudi Arabia's King Salman tour to Asia to promote investment and court investors for the IPO.

Hong Kong would have to overcome some listing restrictions to woo the Saudi listing, a source involved in pitching Hong Kong to the oil giant added.

The current listing rules do not allow companies to list less than 15 percent of their total number of issued shares, and Saudi Arabia is also not currently an accepted jurisdiction of incorporation for Hong Kong listed entities.

As HKEX does not currently recognize the Saudi Stock Exchange (Tadawul) as a legitimate primary listing market, a secondary listing could also be tricky for Hong Kong.

The other stock exchanges in competition to attract the IPO are Toronto, New York, London, Tokyo and Singapore.

Saudi Arabia is planning to list up to a 5 percent stake of Saudi Aramco in 2018 on Tadawul, and also one or more international markets.