Saudi Arabia has taken a key step towards allowing future investors to buy shares in its national oil company, as it prepares for the world’s biggest stock market flotation later this year. Saudi Aramco was recently forced to deny it was planning to shelve plans for its $2tn flotation of 5% of the company, and the new change suggests the planned IPO is still on track. A royal decree published on Friday converted the firm into a joint stock company, meaning it can have more shareholders than its current sole shareholder, the Saudi government.

“This is part of the preparation process for the IPO. You’d expect that to happen,” said a source close to Saudi Aramco. The decree changed the legal status of the oil company from 1 January. The source said the company was doing everything it needed to deliver the IPO for the Saudi government, which has insisted the flotation is on track for the second half of 2018.

There has been intense speculation over where the international listing will take place, with London, New York and Hong Kong in the frame. The UK government had to deny last November that a $2bn loan to the oil company was tied to efforts to woo Saudi Aramco to list in London. The kingdom’s top officials hope to list on New York but the company prefers London, but both may be ruled out because of regulatory obstacles, the Financial Times has reported. “No decision has made on the listing,” a company source told the Guardian.(theguardian)…[+]