A few days after President Donald Trump made a high-profile pitch for Saudi Aramco to list on the New York Stock Exchange, prominent investor Mark Mobius said the city is "pretty much out" of the running.

A number of exchanges including those in New York, London, Hong Kong and Singapore are gunning for the initial public offering of Saudi Arabia's state oil company — estimated to be one of the most valuable companies in the world. Aramco has said it will float its shares on the local Saudi exchange, Tadawul, and another one or two overseas markets in the second half of 2018.

"I think New York is pretty much out because of the risk that they have litigation. London may be out too because they don't want to disclose a lot of the inner workings of Aramco, so it's going to be very interesting to see what happens with that deal," Mobius, the executive chairman of Templeton Emerging Markets Group, said Friday on CNBC's "Squawk Box."

A Financial Times report in June said lawyers warned Saudi Arabia that a New York listing posed "the greatest litigation risk of any jurisdiction." Reuters followed up with a report in August that the Middle Eastern kingdom still favored New York despite the risks.

Trump on Sunday tweeted that it was "Important to the United States!" that Aramco float its shares on the New York Stock Exchange.

Trump's tweet on Saudi Aramco: Would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock Exchange. Important to the United States!

But Mobius said the decision, a closely-watched one amid the anti-corruption drive and political purge in Saudi Arabia, seems to still be up in the air.

He added that a "full and fair disclosure" will be the key for Aramco to attract investors, including his firm Templeton.

"Disclosure is really the key," he said. "Of course, it could be quite exciting. It could be one of the most exciting companies listed ... but they have to disclose what's going on, what are the inner workings and also what will be the decisions regarding earnings because a big part of their earnings go to the government."

Even as Mobius takes a cautious approach when it comes to Aramco, he was explicit in his optimism about Saudi Arabia. He said reforms in the kingdom "have been a long time coming" and it is a good sign that the authorities are accelerating those efforts.

He was referring to the crackdown over the weekend that saw the arrest of dozens of Saudi princes, ministers, officials and businessmen.

"Long term, (I'm) very optimistic," he said. "I think it's just the beginning. I think you're going to see a lot more coming down the road and of course the key now is to set up the institutions to continue this fight."