Dubai (AFP)

The Ryad Stock Exchange, already the largest in the Arab world, was catapulted Wednesday in the ranking of the ten largest stock exchanges thanks to the largest stock market listing in history, conducted by the Saudi oil giant Aramco.

A few minutes after trading began in Ryad, Aramco added $ 1.880 billion to Tadawul, the benchmark of the Saudi stock market, quadrupling its valuation to $ 2.380 billion.

The Saudi market thus becomes the 9th Stock Exchange in importance, ahead of the Toronto Stock Exchange in Canada and out of the top 10 that of Bombay in India, according to Bloomberg News.

Aramco shares rose 10%, the maximum allowed for the day, a few seconds after its introduction on the market. Thursday should give a boost to the capitalization of the Saudi stock market if the title continues to soar.

Saudi Energy Minister Prince Abdelaziz ben Salmane said last week that Aramco's capitalization is expected to reach the $ 2,000 billion Saudi government target time soon.

Established in 1985, Tadawul - of which 199 companies are listed today - was elevated to emerging market status by the US financial services company MSCI in June 2018.

Three months ago, FTSE Russell, a London Stock Exchange market index subsidiary, announced that Saudi stock markets would join the FTSE Emerging Index, a prestigious emerging market index.

- Highs and lows -

The Saudi Stock Exchange went through a severe crisis in 2006 when the benchmark, the Tadawul All-Shares Index (TASI), fell from its historic high of 20,634 points on February 25, 2006 to less than 8,000 points.

The collapse was attributed mainly to strong correction pressures after seven years of steady growth. But the implosion was also attributed to the lack of adequate regulations.

In 2008, TASI had lost 56.5% due to the impact of the global financial crisis that hit almost every global stock market.

Again in 2016, the market fell by 36% after the collapse in oil prices, falling below $ 30 per barrel.

Saudi Arabia, the world's largest exporter of crude oil, derives more than 80 percent of its government revenues from oil revenues.

The inclusion of Tadawul securities in the MSCI and FTSE Russell indices follows a series of stock market reforms by the market and its regulator, the Saudi Capital Markets Authority, to facilitate investment by foreigners.

Foreign institutions with at least 3.75 billion riyals ($ 1 billion, 900 million) under management were allowed to invest in Tadawul. The amount previously required was 18.75 billion riyals.

The regulator has also doubled the amount of shares that foreign institutional investors can hold, up to a maximum of 10% of a listed company.

© 2019 AFP