Wednesday 11 December 2019 2:30 pm

Saudi Aramco shares surge 10 per cent in $25.6bn stock market debut

Saudi Aramco’s shares jumped 10 per cent today, as the kingdom’s state-run oil company started life as a public company on Riyadh’s Tadawul stock exchange.

The rise took the oil behemoth’s market value to nearly $1.9 trillion (£1.45 trillion), meaning it is now comfortably the world’s most valuable listed firm.

Read more: Institutional tranche of Saudi Aramco IPO twice oversubscribed

The government hailed the development as a vindication of the $2 trillion target it initially set for the raise. Speaking in Madrid, energy minister Prince Abdulaziz bin Salman said:

“It’s a great day for Saudi Arabia and the leadership of Saudi Arabia and for the people of Saudi Arabia. It’s a D-Day for Aramco, it’s a day of reckoning and vindication.”

The rise comes after four years of wrangling by Crown Prince Mohammed bin Salman since he first announced he wanted the company to list.

The years in between have been marked by repeated delays. However, Saudi Aramco finally raised $25.6bn in the largest ever Initial Public Offering (IPO).

Aramco’s float surpassed that of China’s Alibaba, which debuted on Wall Street five years ago at $25bn, giving it a $1.7 trillion valuation.

Saudi Aramco’s share price rose by 10 per cent in early trading to 35.2 riyal (716p), making it the world’s most valuable company.

Its market cap is more than that of the five biggest international oil companies combined.

However, this may be in part down to a push by bin Salman to push for a $2 trillion valuation by asking Saudi Arabia’s richest institutions and families to buy into the stock.

Aramco’s float is a central pillar of bin Salman’s plans to diversify the Saudi economy away from its reliance on oil.

In recent weeks Riyadh scaled down its ambitions for the sale, choosing to cancel its international roadshow to focus instead on local Saudi and Gulf investors.

Last month it was reported that the national investment bodies of Abu Dhabi and Kuwait are planning investments in the IPO.

Read more: Saudi Aramco IPO on track as retail tranche oversubscribed

Multiple sources told Reuters that the Abu Dhabi Investment Authority (Adia) is taking a stake worth at least $1bn (£780m).

Aramco officials have visited Kuwait and Abu Dhabi, which have strong political ties with Riyadh, to discuss participating in the offering.