Daily Management Review

Reuters: Changes in listing in Britain will attract state-owned companies


07/18/2017


Proposed changes in the listing in Britain can attract companies with state participation to the London stock markets, as the authorities of oil-rich countries are preparing for a wave of sales, writes Reuters.



IgnisFatuus
IgnisFatuus
However, some investors and corporate governance groups say that Britain's move to make capital markets attractive to state-controlled companies by weakening some of the rules, may reduce the quality of companies on its stock exchange and make shareholders less secure if unforeseen circumstances occur.

The UK financial regulator has proposed a new premium category for state-owned companies, designed to make the market more attractive to the IPO of the oil giant Saudi Aramco, which is projected to become the largest initial placement in the world.

This step has already been approved by the financial lobby groups of Great Britain, which helped to make sure that the country’s capital markets remain attractive after leaving the European Union.

Capital market lawyers say that, apart from Saudi Arabia, the changes will affect a number of countries that are also at the center of asset privatization plans.

"This expands London's appeal to companies in countries such as Saudi Arabia, Kazakhstan, Russia and Southern Europe," said Raj Karia, a partner at Norton Rose law firm. "There are many companies in the world that are publicly owned and privatized, and London is trying to attract countries outside of Europe on the eve of Brexit." 

The fall in oil prices stimulated privatization in the Middle East. Last year, Saudi Arabia, Oman and Abu Dhabi announced intentions to sell part of their oil assets. Romania and Greece are also expected to sell some of their state assets.

source: reuters.com






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