SAUDI Arabia’s oil company Aramco gained 10% in its first moments on the stock market in a dramatic debut that held until closing and pushed its value up to 1.88 trillion dollars (£1.43tn), surpassing Apple as the largest listed company in the world.
Trading on the Saudi Tadawul stock exchange came after a mammoth 25.6 billion (£19.5bn) initial public offering that set the record as the biggest in history, overtaking the 25bn dollars raised by China’s Alibaba in 2014.
Demand during the bookbuilding period for Aramco’s IPO reached 106bn dollars, with most of that generated by Saudi investment.
Aramco, owned by the state, has sold a 1.5% stake in the company, pricing its shares before trading at 32 Saudi riyals, or what is £6.49.
At a pre-trading auction earlier in the morning, bids for Aramco had already reached the 10% limit on stock price fluctuation allowed by Tadawul. That pushed the price of shares in opening moments to 35.2 riyals, or £7.14 a share, where it held until closing.
A attack in September blamed on Iran struck Aramco’s main processing facility, but the company remains attractive to many local investors.
Aramco is worth more than the top five oil companies – Exxon Mobil, Total, Royal Dutch Shell, Chevron and BP – combined. It also has one of the lowest costs of production.
Internationally, investors have been spooked by the geopolitical risks associated with Aramco, as well as the Saudi crown prince’s policies and the stain on the kingdom’s reputation following the killing of Saudi writer Jamal Khashoggi by Saudi agents in Turkey last year.
Rather than float internationally, Aramco sold locally 0.5% of its shares to individual retail investors – most of whom are Saudi nationals – and 1% to institutional investors, most of which are Saudi and Gulf-based funds.
The retail portion was limited to Saudi citizens, residents of Saudi Arabia or nationals of Gulf Arab states. Crown Prince Mohammed bin Salman plans to use the money raised from the sale of a sliver of the kingdom’s crown jewel to diversify the country’s economy and fund major national projects that create jobs for millions of young Saudis entering the workforce.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here