Tadawul will be ready for Aramco listing by end-June: CMA

Saudi Arabia is expected to overhaul its stock market rules by the end of June to prepare for the local listing of Saudi Aramco, Reuters reported, citing Capital Market Authority (CMA) Chairman Mohammed El Kuwaiz.

“Once [the price stabilization guideline] is issued, we can then say that the Saudi market will be fully amenable to accommodate an offering of the size of Saudi Aramco, or indeed of any size,” El Kuwaiz told the news agency in New York.

The drafting of the regulation was at an "advanced stage", and it will be issued before the end of the first half of the year, he added.

The CMA issued updated rules in the last couple of months covering how securities are sold in the Kingdom and how the offer price of an IPO is calculated using the bookbuild method, the chairman informed.

Price stabilization is common on developed markets and allows underwriters of an initial public offering (IPO) to use some of the company’s stock to bolster its price, should it fall in the days after it starts trading, or the volume of shares changing hands is weak.

Earlier this week, Saudi Crown Prince Mohammed told Reuters that five percent of Aramco could take place at the “end of 2018 or early 2019, depending on market conditions.”

Several international bourses are vying for the mega IPO, including New York, London, Hong Kong, Tokyo, and Toronto.

Separately, the CMA chairman said they are expecting to start work by year-end on rules governing dual-listings on the Saudi stock market that would be sent out for market feedback early next year.

"The timetable could be brought forward if a company approached it wanting to list on another market,” El Kuwaiz said.