Saudi Arabia selects nine banks for Aramco IPO

Saudi Arabia has selected nine banks to take part in the planned initial public offering (IPO) of state-owned energy giant Aramco, another step towards possibly the world's biggest sale on the stock market.

Riyadh hopes the IPO of 5 percent of Aramco could raise $100 billion for the country, with Crown Prince Mohammed bin Salman's ambitious economic projects resting on the sale.

But many analysts believe that Saudi Aramco is not worth the $2 trillion touted by Riyadh and others have mentioned a lack of transparency in the state owned energy giant’s books.

Plans for the IPO have been stalled, while oil prices remain low but this week saw another sign that Riyadh might be preparing for the Aramco sale soon.

Saudi Arabia named Yasser al-Rumayyan, who is close to Prince Mohammed, as Aramco's new chairman and Riyadh has said the company will be separated from the energy ministry.

Aramco chief Amin Nasser said on Tuesday that the energy giant was ready for the IPO when the government was.

"One of the primary listings is going to be local but we are also ready for listing outside," Nasser said.

The IPO will begin with a 1 percent sale on the Riyadh stock market this year, and 1 percent next year, Reuters reported on Wednesday.

Aramco has already chosen the banks that will take part in the sale, Saudi sources told the news agency.

JPMorgan, Morgan Stanley, National Commercial Bank, Bank of America Merrill Lynch, Goldman Sachs, Credit Suisse, Citi, HSBC and Saudi Arabia’s Samba were named by Reuters.

Saudi Arabia is concerned with its reliance on oil prices and changes in the energy market. Plans to diversify the economy hinge heavily on the creation of NEOM mega city.

Investors will likely be put off by a shake down of senior business leaders in the kingdom by Mohammed bin Salman and the blowback from the murder of critical Saudi journalist Jamal Khashoggi.