Aramco reaches prince’s $2T goal in second-day surge

RIYADH - 12 December 2019: Saudi Aramco jumped for a second day, pushing the oil giant’s value beyond the $2 trillion mark that alienated global investors and potentially making further share sales abroad more difficult, Bloomberg reported.

The stock climbed by the daily 10 percent limit to 38.7 riyals at the open in Riyadh before trimming gains. It rose 9.4 percent to 38.50 riyals at 11:30 a.m. local time in trading of 313 million shares, compared with 31.6 million for all of Wednesday.

The surge reflects the kingdom’s efforts to engineer a successful start to trading after international investors balked at the price: Saudi Arabia encouraged local individuals to buy and hold the stock through cheap loans and a bonus-share plan, while pushing wealthy families and regional allies to buy as well. The offering consisted of only 1.5% of Aramco’s stock, so that investors who didn’t get allocated shares in the IPO had to buy in the secondary market.

Aramco raised $25.6 billion in the deal, selling shares at 32 riyals each and overtaking Microsoft Corp. and Apple Inc. as the most valuable listed company.

The IPO has become synonymous with Saudi Arabia’s Crown Prince Mohammed bin Salman and his efforts to reshape the economy of the world’s biggest oil exporter, Bloomberg said. But, according to the news agency, his insistence on the $2 trillion valuation deterred international investors, many of whom said the stock was too expensive given governance and geopolitical concerns.