Aramco briefly hits US$2 trln market value on 2nd trading day

December 12, 2019 16:54
Amin H. Nasser, President and CEO of Aramco, attends the official ceremony marking the debut of the Saudi oil giant on the Riyadh stock market on Wednesday. Photo: Aramco website/Handout via Reuters

Saudi Aramco’s shares opened up 10 percent in their second day of trading in Riyadh on Thursday, briefly sending the state oil firm's market value above the US$2 trillion mark, Reuters reports.

The shares hit 38.7 riyals (US$10.32) before easing to around 37 riyals after about 15 minutes of trade, up 5 percent, the report said.

On their debut on the Riyadh market on Wednesday the shares gained the maximum permitted 10 percent on the day.

Aramco became the world’s biggest initial public offering (IPO) last week by raising US$25.6 billion, surpassing the US$25 billion listing in 2014 of Chinese e-commerce giant Alibaba.

Bernstein analysts initiated coverage of the stock on with an “Underperform” rating on Thursday, estimating its value at around US$1.36 trillion, below Aramco’s initial US$1.7 trillion valuation.

US energy giant Exxon Mobil is worth less than US$300 billion.

"Saudi Aramco is the largest, most profitable oil company in the world - but size is not everything,” Bernstein analysts wrote, flagging the risk of slow net income growth if oil prices stay flat, the report said.

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