Business / Financial Markets

Tokyo Stock Exchange emerges as global frontrunner for Saudi's Aramco IPO

Kyodo

Saudi Arabian Oil Co., the world’s largest oil firm, is considering conducting its initial public offering in two stages, with the Tokyo Stock Exchange emerging as the international frontrunner, The Wall Street Journal reported Thursday in its online edition.

The state oil giant, known as Aramco, is planning to split what would be the world’s largest IPO into two steps: debuting a portion of its shares on the Saudi stock exchange later this year, followed by an international offering in 2020 or 2021, according to the U.S. business daily, which cited people familiar with the plans.

“The company is leaning toward Tokyo as the venue for the second phase of its proposed plan” as political uncertainty in the U.K. and China has reduced the appeal of London and Hong Kong’s markets, the report said.

Investors remain wary of the U.K.’s possible departure from the European Union without a deal in the fall under the leadership of Prime Minister Boris Johnson. Continued anti-government protests in Hong Kong and China’s response thus far have also stoked speculation that Beijing may use force to crush demonstrations.

The corporate value of Aramco is believed to be $2 trillion.

Earlier, the Tokyo Stock Exchange was thought to have dropped off the list of candidates for the IPO. If Aramco picks the TSE for the international public offering, it will likely boost the global presence of the market.

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