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Report: Political and economic turmoil has Saudi Aramco favoring Tokyo for IPO

Saudi Arabian Oil Co. is planning to split its long-anticipated record-breaking IPO into two stages, debuting a portion of its shares on the Kingdom's stock exchange later this year ahead of an international offering in 2020 or 2021, The Wall Street Journal reported Aug. 29, citing people familiar with the matter.

The planned offering has investment banks competing for advisory roles on the set of deals, which are expected to raise net proceeds of US$100 billion.

The company is reportedly favoring the Tokyo Stock Exchange because of political turmoil and economic uncertainty in Hong Kong and the U.K. Protests to challenge an extradition bill by Hong Kong's government and uncertainty about U.S.-China trade relations have led to IPO delays on the Hong Kong exchange in both the healthcare and retail sectors. On Aug. 28, Queen Elizabeth accepted a request from the U.K. government to suspend Parliament, making it harder for members of Parliament to block a no-deal Brexit.

Concern that Saudi assets could be targeted by terrorism-related lawsuits reportedly has Saudi Aramco Chairman Khalid al-Falih opposing a listing on the New York Stock Exchange, even though Saudi Crown Prince Mohammed Bin Salman pushed for a U.S. listing as a way to improve ties with the U.S.