Saudi Aramco shares surged after the oil producer’s initial public offering, valuing the company at a record US$1.88 trillion in the culmination of a four-year effort by the kingdom to list its crown jewel.
The start of trading in Riyadh marks the end of a saga that’s been intertwined with Crown Prince Mohammed bin Salman’s rise to global prominence and his Vision 2030 plan to reform the Saudi economy. First announced in an interview with Economist in January 2016, the IPO came after a tumultuous period that included the murder of government critic Jamal Khashoggi and the imprisonment of prominent Saudis in Riyadh’s Ritz Carlton.
Aramco, the world’s largest oil producer, is so big that it easily dwarfs the rest of the companies in the Saudi market, which have a combined value of about US$500 billion. Adding in Aramco at its current market value, the kingdom’s bourse becomes the world’s seventh-biggest stock market, overtaking Canada, Germany and India. Saudi Arabia, though, only sold 1.5 per cent of the company’s capital, meaning that barely any of its shares will trade.
“Fundamentally, especially when taking ESG considerations into account, the valuation is stretched,” said Siddharth Sanghvi, head of emerging markets equity research at Amundi. Wealthy Saudis were pressed to buy shares after the start of trading to make the IPO a success, the Financial Times reported Tuesday.
allantowler1 And yet Albertans are endlessly and sanctimoniously told that oil/gas is a dying industry.
Little Justin must be so proud