Business

Saudi Aramco shares to start trading on Dec 11

RIYADH Saudi Aramco shares will start trading domestically on Wednesday, the Riyadh stock exchange said, after the energy giant raised US$25.6 billion (S$35 billion) in the world's biggest initial public offering.

Aramco on Thursday priced its IPO at 32 riyals (S$12) a share, the high end of the target range, surpassing the US$25 billion raised by Chinese retail giant Alibaba in its 2014 Wall Street debut.

"The Saudi Stock Exchange (Tadawul) announces that the listing and trading of the Saudi Arabian Oil Company (Saudi Aramco) will start on Wednesday," the bourse said in a statement on Friday.

Aramco shares will trade within a fluctuation limit of plus or minus 10 per cent, the statement added.

Aramco said the sale of 1.5 per cent of the company was oversubscribed by nearly 4.7 times.

Aramco will sell three billion shares and it could exercise a "greenshoe" option, selling additional shares to bring the total raised up to US$29.4 billion.

The market launch puts Aramco's value at US$1.7 trillion. But the scaled-down IPO is still a far cry from the blockbuster originally planned by Crown Prince Mohammed bin Salman.

The stock sale, first announced in 2016, was initially expected to raise as much as US$100 billion from the sale of up to 5 per cent of the company.

The IPO is a crucial part of Prince Mohammed's plan to wean the economy away from oil by pumping funds into megaprojects and non-energy industries such as tourism.

But sceptics say the IPO's proceeds would barely cover the kingdom's budget deficit for a year.- AFP

BUSINESS & FINANCE