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Saturday, October 16, 2021

Saudi Aramco Now the Most Valuable Public Company

Saudi Arabian oil company Aramco surpassed Apple (NASDAQ:AAPL) as the world’s most valuable public company Wednesday when its shares made their debut on the Saudi stock exchange.

The shares’ 10% rally brought state-owned Aramco’s value to $1.88-T. The 1.5% of the company that is listed has raised $25.6-B, a record for an IPO.

As of Tuesday’s close in the US, Apple was valued at $1.19-T

Wednesday’s shares were sold mainly to investors in the region: a 0.5% stake to individual retail investors in Gulf Arab states and 1% to institutional investors.

Non-Saudi investors contributed just 23% of the institutional investment generated in the IPO. Saudi companies and government institutions raised 51% of the overall demand.

The shares rose sharply in the 1st moment of trading Wednesday to hit the 10% limit on stock price fluctuation allowed by Saudi regulators. That pushed the price to 35.2 riyals, or 9.39/share, where it held until closing at 3p local time.

Crown Prince Mohammed bin Salman plans to use the money raised from the sale to diversify the country’s economy and fund major national projects that create jobs for millions of young Saudis entering the workforce.

The sale raises capital for the Public Investment Fund overseen by Prince Mohammed, but it is only part of a much larger transformation program to move the economy away from reliance on Crude Oil exports for revenue.

Aramco has exclusive rights to produce and sell the Kingdom’s energy reserves. It was founded in Y 1933 with America’s Standard Oil Co. before becoming fully owned by Saudi Arabia 40 yrs ago.

A brief ceremony as trading started Wednesday saw a countdown in Arabic, the sounding of a bell, a light show with music and applause all around. At the celebration at the Fairmont hotel in Riyadh, Aramco Chairman Yasir Al-Rumayyan, described the sale as “a proud and historic moment for Saudi Aramco and our majority shareholder, the kingdom.

Stay tuned…

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