Aramco: Brexit could make LSE listing less attractive

29 June 2016 - 12:00 am UTC

The London Stock Exchange’s bid for a slice of Saudi Aramco’s anticipated public offering might have become more complicated after Thursday’s Brexit vote, said three industry bankers.

The vote raised the possibility that the UK’s flagship exchange could lose access to European Union capital markets, potentially shrinking the pool of liquidity Saudi Aramco would have access to in a London listing, they said.

LSE is the third largest exchange by market cap of issued shares behind the New York Stock Exchange and NASDAQ, according to the World Federation of Exchanges. That might understate the value of an Aramco listing while the UK is in the EU, however, as an LSE listing allows investors across the continent to trade shares through BATS Europe and BATS Chi-X as well, the first banker noted.

That ability to tap continental markets could be subject to scrutiny in Brexit talks, potentially making rival venues more attractive….