Aramco said the sale of 1.5 per cent of the firm, the bedrock of Crown Prince Mohammed bin Salman's ambitious strategy to overhaul the oil-reliant economy, was oversubscribed almost 4.7 times. Reuters reported that the size of the deal could yet rise to $29.4 billion, if an option to sell more shares is exercised. Apple (NASDAQ: AAPL), now the world's biggest public company, has a market valuation of about $1.2 trillion as we speak.
The historic IPO fell short of the crown prince's expectations when he initially proposed the idea in 2016 in hopes of raising up to $100 billion. And the company ditched plans to list outside Saudi Arabia, amid headwinds including lower oil prices, heightened geopolitical tensions and climate change concerns.
Another factor driving the launch could be young ruler Crown Prince Mohammed bin Salman's desire to "have a flashy project to show he is reforming the country", he said. The IPO esteems Aramco at generally $1.7 trillion, making it the most significant traded on an open market organization on the planet in front of Apple (AAPL), which is worth about $1.15 trillion.
Saudi Arabia on Monday said its budget deficit for next year would widen as the world's top oil exporter faces tumbling oil prices and production cuts.
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But Aramco managed to recover the bulk of its production levels more quickly than markets expected, bringing the oil price back down in the same week - something El-Erian believes gives the company credibility and clout for investors. The nation's sovereign wealth fund expects to spend "a lot" of the funds on local investments to boost its domestic economy, Finance Minister Mohammed Al Jadaan said on Bloomberg TV Thursday.
Aramco, which pumps and produces Saudi Arabia's crude oil to the world, is floating a 1.5% stake in the company, or 3 billion shares.
Aramco produces one out of every eight oil barrels in the worldwide market and holds five times larger liquid oil reserves as compared to the combined reserves of global behemoths- Exxon Mobil, Chevron, BP, Total, and Royal Dutch Shell.
The sale was boosted by Saudi Arabia's regional allies, whose participation was a relief for the kingdom after the IPO marketing plans failed overall.
An initial loss estimation from the strikes on Aramco's facilities was 2 billion riyals ($533 million), a third source stated.