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World's largest IPO: Saudi Aramco makes debut

Credit: Reuters Studio
Published on December 11, 2019 - Duration: 01:52s

World's largest IPO: Saudi Aramco makes debut

Saudi Aramco shares surged the maximum permitted 10% above their IPO price on their Riyadh stock market debut on Wednesday, closing in on a $2 trillion valuation that would make it the world's most valuable listed company.

David Pollard reports.

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World's largest IPO: Saudi Aramco makes debut

Big numbers as Saudi Arabia rings the opening bell on Aramco's share market debut.

And small: just 1.5 per cent of the state oil giant has been floated.

But it's still enough for its IPO to raise a record of nearly 26 billion dollars ... As for the shares: within a short time, they surged the maximum 10 per cent permitted by the Riyadh exchange.

Around 770 million changing hands in the first hour of trading - at up to 35.2 riyal, just short of 9 dollars 40, each.

That gives Aramco a valuation close to the 2 trillion dollars wanted by Saudi authorities.

That dwarfs Exxon - the U.S. oil major is worth around 300 billion dollars - or even tech giant

Class="kln">Apple, valued at 1.2 trillion.

Aramco's CEO is Amin Nasser.

(SOUNDBITE) (English) ARAMCO'S CHIEF EXECUTIVE (CEO) AMIN NASSER, SAYING: "Aramco is the biggest listing in the history ... If you talk about reliability, if you talk about financially, financial performance, if you talk about the technology, the carbon intensity, the company - and of course safety - the company is a global leader in all of these sectors." Some had wondered whether this day would ever come... After a series of drone strikes hit Aramco facilities in September.

Production was soon restored, and an OPEC output cut last week has given the market some confidence over the outlook for crude prices.

But despite a huge promotional campaign foreign investor confidence in Aramco still appears weak.

Some fund managers have cited concerns over governance, environmental issues and regional politics.

Plans for IPO roadshows in New York and London were cancelled due to muted interest.

Analysts say demand may rise when Aramco joins MSCI and FTSE global benchmarks later this month.

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