Shares in state-backed oil giant Saudi Aramco have begun trading 10% above their float price following a record-breaking initial public offering (IPO).
On their first day of trading on the Saudi stock exchange shares in the firm were priced at a round 35.2 riyals (716p), higher than the IPO price of 32 riyals (651p).
This gives Aramco a market value of around US$1.9trn (£1.4trn), making it the biggest listed company in the world, although this is still below the US$2trn (£1.5trn) market cap that had been sought by Saudi Arabia’s crown prince, Mohammed bin Salman.
At its IPO last week Aramco managed to raise US$25.6bn by selling 1.5% of its equity, the first step in opening up the world’s largest oil company to public investors.
The decision to sell off some of Aramco’s shares, effectively divesting part of the kingdom’s ownership of the firm, is part of Salman’s ‘Vision 2030’ strategy which aims to reduce Saudi Arabia’s dependence on oil and drive economic diversification with the development of health, infrastructure and tourism.
The float in Saudi Arabia is also expected to be followed by a further listing on an international exchange at a later date.