World's largest IPO: Saudi Aramco makes debut

Editor’s note: The following is a transcript of the accompanying video. ©2019 Thomson Reuters

Big numbers as Saudi Arabia rings the opening bell on Aramco’s share market debut; and small: just 1.5% of the state oil giant has been floated. But it’s still enough for its IPO to raise a record of nearly $26 billion.

As for the shares: within a short time, they surged the maximum 10% permitted by the Riyadh exchange. Around 770 million [shares] changing hands in the first hour of trading — at up to 35.2 riyal, just short of [$9.40], each.

That gives Aramco a valuation close to the $2 trillion wanted by Saudi authorities. Dwarfing Exxon — the US oil major is worth around $300 billion — or even tech giant Apple, valued at $1.2 trillion.

Aramco's CEO is Amin Nasser:

“Aramco is the biggest listing in the history ... If you talk about reliability, if you talk about financially, financial performance, if you talk about the technology, the carbon intensity, the company — and, of course, safety — the company is a global leader in all of these sectors.”

Some had wondered whether this day would ever come after a series of drone strikes hit Aramco facilities in September. Production was soon restored, and an OPEC output cut last week has given the market some confidence over the outlook for crude prices.

But, despite a huge promotional campaign, foreign investor confidence in Aramco still appears weak. Some fund managers have cited concerns over governance, environmental issues, and regional politics. Plans for IPO roadshows in New York and London were cancelled due to muted interest.

Analysts say demand may rise when Aramco joins MSCI and FTSE global benchmarks later this month.