An advisory council to Saudi Arabia's government has asked the kingdom's securities regulator to study the impact of listing Saudi Aramco on the local bourse amid concern that a huge initial public offering could damage the market.
The government has said it plans to sell about 5 percent of Aramco, hoping to raise some $100 billion or more in what would likely be the world's biggest initial public offering (IPO). The sale is expected in the second half of 2018.
Saudi officials have said that in addition to Riyadh, they may list Aramco on one or more foreign markets such as New York, London and Hong Kong, which would spread the burden of the IPO and reduce the strain on the Saudi market.
The Saudi market only has a capitalisation of about $470 billion, meaning it could be destabilised by Aramco's listing if other stocks are sold heavily to raise funds for investment in the oil company.