Saudi Aramco valuation hits $2 trillion in boost for Crown Prince

Saudi Aramco has reached the Saudi Crown Prince Mohammed bin Salman’s coveted valuation target of $2 trillion.

Aramco’s share price on Saudi Arabia’s Tadawul exchange jumped nearly 10% to 38.7 Saudi riyals ($10.32), briefly valuing the oil giant at $2 trillion Thursday.

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The company had a valuation of $1.96 trillion and shares at 36.8 riyals by the end of the day’s trading which is an increase from Aramco’s initial public offering, set at $1.7 trillion.

Saudi Aramco, also known as the Saudi Arabian Oil Company (formerly Arabian-American Oil Company), is a Saudi Arabian national petroleum and natural gas company based in Dhahran, Saudi Arabia.

One of the main reasons behind the share sale being stalled is the prince’s announcement to list the firm.

According to senior Saudi advisers familiar with the IPO planning, a number of wealthy Saudi families, some of whom had relatives caught up in the Crown Prince’s 2017 anti-corruption crackdown, as well as government funds, were asked to buy shares in the company to support a $2 trillion valuation after it was listed on the domestic exchange.

The country’s sovereign-wealth fund has poured billions of dollars into the market to help support prices during times of political turmoil, The Wall Street Journal has reported.

In total, the IPO drew $106 billion in orders from institutional investors. Aramco and its underwriters allocated Saudi companies, most of which are owned by wealthy individuals and the government, the highest proportion of shares in the listing, making up 37.5% on shares sold to institutional buyers. Asset managers were handed 26.3% of the 2 billion shares available to professional buyers.

Saudi government intends to meet the previously set goal to list the oil company on an international exchange or issue more shares of Aramco domestically.

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