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Saudi Aramco touches $2tn in value on second day of trading

Julia Kollewe
Photograph: Amr Nabil/AP

Saudi Aramco has touched a market value of $2tn, the day after the Saudi state-backed oil company made its stock market debut.

The shares rose almost 10% at the open on the second day of trade on Riyadh’s Tadawul stock exchange, lifting the company’s market value briefly to $2tn, before giving up some of their gains.

Its shares rose from Wednesday’s close of 35.2 Saudi riyals to a high of 38.7 riyals before easing back to 37.3 riyals.

The Saudi oil giant became the world’s biggest listed company on Wednesday, the first day of trading, when its shares rose 10%, valuing it at $1.87tn. The share price surge was capped at 10% under rules to safeguard market stability.

The two days of gains takes the valuation further ahead of Apple, the world’s second-biggest listed company which is worth about $1.19tn, although just 1.5% of Aramco’s shares were sold to investors.

Saudi Crown Prince Mohammed bin Salman had sought a $2tn valuation for Aramco, but international investors balked at the price, in light of the lower oil price, climate change concerns and geopolitical risks.

The float was marketed almost exclusively in Saudi Arabia and across the Middle East after receiving a tepid response from international investors, who have also been wary of Aramco’s close ties to the Saudi regime amid human rights concerns following the murder of dissident journalist Jamal Khashoggi.

The Saudi government encouraged Middle Eastern state funds and wealthy Saudi families to support the IPO. Global funds are expected to buy shares as Aramco will be included in global emerging markets indices.

Aramco is the world’s biggest fossil fuel producer. The Saudi state raised $25.6bn through the float – the biggest single injection of capital into the fossil fuel industry, despite mounting concerns over the global climate crisis.

The oil producer made profits of $46.9bn for the first six months of this year, down from $53.2bn in the same period last year but still well ahead of the world’s six biggest listed oil companies combined.