Markets

Saudi Aramco hits $2 trillion market cap on second day of trading

Key Points
  • The figure, nearly $1 trillion higher than the world's next-largest public companies Microsoft and Apple, was long ridiculed by much of the international financial community.
  • Share rose 10% to 38.7 riyals apiece ($10.32) but slipped back to 37 riyals within minutes of the market open.
Saudi Aramco hits $2 trillion market valuation on second day of trading
VIDEO2:0002:00
Saudi Aramco hits $2 trillion market valuation on second day of trading

Shares of Saudi Aramco surged on their second day of public trading, pushing the kingdom's record IPO to a gargantuan $2 trillion valuation and briefly touching Crown Prince Mohammed bin Salman's long-held target for the company.

Share rose 10% to 38.7 riyals apiece ($10.32) but slipped back to 37 riyals within minutes of the market open.

The figure, nearly $1 trillion higher than the world's next-largest public companies Microsoft and Apple, was long ridiculed and regarded with disbelief by much of the international financial community.

Riyadh on Wednesday made history by listing 1.5% of its state-run oil giant on its local stock exchange, the Saudi Tadawul, in what was the largest IPO on record. Shares went limit up, rising 10% in price as trading started, giving the company a valuation of $1.88 trillion on its first day of trading.

Cramer: Saudi Aramco's IPO shows there's appetite for equities in Saudi Arabia
VIDEO4:4604:46
Cramer: Saudi Aramco's IPO shows there's appetite for equities in Saudi Arabia

While the massive valuation will be seen as a win for the Saudi crown prince, it lacked the international interest the kingdom had hoped for, relying instead on local investors after the company canceled overseas roadshows in London and New York.

The long-awaited IPO of world's most profitable company forms the centerpiece of Crown Prince Mohammed bin Salman's Vision 2030 program aimed at transforming the Saudi economy. The crown prince first floated the idea in 2016, stunning market observers with his suggestion of the $2 trillion valuation. That figure was brought down by financial advisors and banks earlier this year to a range of between $1.5 trillion and $1.7 trillion.