Thursday, December 12, 2019
Zawya - What's next for Saudi Aramco after hitting $2trln valuation?
Saudi Aramco’s shares closed 4.55 per cent higher on Thursday, hitting 36.8 Saudi riyals ($9.81), giving the oil giant a valuation of $1.96 trillion.
The state-owned company’s shares had risen 10 per cent in early trading, peaking at 38.7 riyals, to briefly nudge its market value above the $2 trillion targets sought by Crown Prince Mohammed bin Salman.
“What we saw today were mainly retail orders,” Marie Salem, Head of Institutions at Dubai-based Daman Securities told Zawya.
On their debut on Wednesday, Aramco’s shares had gained the maximum permitted limit of 10 per cent above their IPO price and closed at 35.2 riyals with a market value of $1.88 trillion.
The Aramco IPO now holds the title of the world’s largest, as the $25.6 billion it raised last week surpassed the $25 billion record set by China’s Alibaba in 2014.
“We expect the value to stabilise around $2 trillion within the coming week or two. We also expect to see more volumes on the stock going forward as institutional start to enter the stock following its MSCI inclusion,” Salem added.
MSCI said Saudi Aramco would be included in its indexes with effect from December 18. Aramco’s inclusion will be completed in a single phase based on the stock’s closing price (35.2 riyals) on the first day of trading.
The oil company, which produces more than a tenth of global crude supply, made profits of $46.9 billion in the first six months of 2019, down from $53.2 billion for the same period last year.
Source - Zawya