Saudi Arabian Oil Co, otherwise known as Saudi Aramco, surged on its second day of trading to reach the coveted US$2 trillion valuation sought by Saudi ruler Crown Prince Mohammed bin Salman, a goal which had garnered scepticism from international investors.
On Wednesday, Aramco shares began trading on Saudi Arabia’s stock exchange and zoomed 10% higher than the float price of 32 riyals, and surpassed US tech giants Microsoft Corp. and Apple Inc. to become the most valuable listed company.
At its IPO, Aramco, which is the world’s largest listed oil company, raised US$25.6bn by selling just 1.5% of its equity.
The decision to sell off some of Aramco’s shares, effectively divesting part of the kingdom’s ownership of the firm, is part of the Crown Prince'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.
Aramco reported a profit of around US$46.9bn for the first half of 2019, with most of that returned to the state in dividends.
The float in Saudi Arabia is expected to be followed by a further listing on an international exchange at a later date.
Prince Mohammed said in 2016 that a dual listing could raise as much as US$100bn, with the Wall Street Journal reporting last week that Saudi officials recently met with international investors to discuss a possible listing of Aramco’s shares in Asia.
Shares traded 16% higher than the IPO price at 37.2 riyals on Thursday.