New UK listing rules set to attract state companies beyond Aramco

LONDON: Proposed changes to Britain´s listing regime are likely to attract a series of state-backed companies to London´s stock markets as governments in oil rich states prepare for a wave of asset sales.

However some investors and corporate governance groups say Britain´s move to make its capital markets attractive to state-controlled firms by loosening some of the rules may lower the quality of companies on its stock exchange and leave shareholders with less protection when things go wrong.

The UK financial regulator proposed a new "premium" listing category for state-owned companies on Thursday, intended to make the market more attractive for oil giant Saudi Aramco as it plans what is expected to be the world´s largest ever initial public offering.

The move was applauded by Britain´s financial lobby groups as helping to make sure the country´s capital markets remain attractive once it leaves the European Union. Capital markets lawyers say that as well as Saudi Arabia, the changes will appeal to a number of countries that are also in the midst of asset privatisation plans.  "This broadens the appeal of London for companies in countries like Saudi Arabia, Kazakhstan, Russia, and southern Europe," Raj Karia, partner at law firm Norton Rose, told Reuters.