The chief executive of the United States-based Nasdaq exchange said that large companies such as Saudi Aramco could benefit from dual listings of their shares on different exchanges, but declined to comment on the specifics of a potential listing of the state-owned oil giant on its exchange.
Speaking at the World Government Summit in Dubai on Monday, the president and chief executive of Nasdaq, Adena Friedman, explained that there were benefits to listing equities on two exchanges, depending on the size of the company, its liquidity and the time zones of the exchanges the equities are listed on.
"Dual listing in the same general time zone, that doesn't have a huge amount of benefit," Friedman said.
Addressing whether or not a dual listing would work for Saudi Aramco, which is currently planning to list its shares on the Saudi stock market, Tadawul, as well as one other global exchange, Friedman added: "I think any company where you look at an event of that size and that amount of liquidity that's coming into the market, I think that you can support a dual listing.
“It doesn't mean that you have to do one, but you can certainly support dual listings - particularly in different time zones (as) that allows for different liquidity pools to develop as investors wake up in different parts of the world.”
When asked whether a listing for Aramco would be seen on Nasdaq, Friedman said that it was “extremely proud of all the companies that choose to come to Nasdaq, but we don't comment on any specific issuer”.
“We are the home to the four largest companies in the world - we're extremely proud of that, and we're home to some of the great innovators of our time. Over just the last year, we've had $350 billion of market cap switch from the New York Stock Exchange to Nasdaq and in the last decade it's been $1 trillion. And the reason is that companies want to be part of the future. They don't necessarily want to be part of the past.”
Alongside its New York base, Nasdaq is a technology provider to other exchanges, and Friedman said that it has worked with Nasdaq Dubai, Dubai Financial Market and with the Saudi stock exchange, Tadawul.
“I think that in general we are seeing a rapid, rapid advancement of the capital markets here in the region - in Dubai, in Abu Dhabi as well as in Saudi Arabia,” Friedman said. “I think that's actually hugely beneficial to not only local investors but also to international investors who are looking to get more involved in the stocks and in the instruments that are traded here.”
She said that those in charge of local markets “have been doing a great job in developing a very robust regulatory oversight that allows for fair trading”, pointing to the importance of transparent data not only for markets, but also for the companies listed on them so that potential investors have an ability to properly understand where they are putting their money.
“If you can create that environment, then you've created a great capital market,” she said.
Alongside its Tadawul listing, stock exchanges in London, New York, Japan and Hong Kong have all been cited as potential locations for a dual listing of Saudi Aramco's shares.
Speaking at a conference in Abu Dhabi on Thursday, the chairperson of Saudi Arabia's stock exchange said that it was ready for any decision on the listing of Saudi Aramco shares.
Saudi Arabia’s government is planning to float a 5 percent stake in Saudi Aramco, according to Reuters.
(Reporting by Michael Fahy; Editing by Shane McGinley).
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