The Saudi Arabian oil giant Aramco's share price climbed on the Ryad Stock Exchange on Thursday, raising the company's value to nearly $ 2 trillion, an amount the government is actively seeking to achieve.
At the close of trading at 12:00 GMT, Aramco's share price was 36.80 riyals ($ 9.81), up 4.55%, bringing the company's valuation to 1,962. billions of dollars, after strong fluctuations in the day.
"It is unlikely that this rise will continue," said Capital Economics in an analysis.
"It has been reported that the authorities have pressured local investors and wealthy families to buy shares in the secondary market to ensure that the start-up (of Aramco in the market) does not fall to dish, "said the London-based think tank.
Crown Prince Mohammed bin Salman, de facto leader of the kingdom, had evoked a valuation of 2.000 billion dollars four years ago by presenting the project of IPO of the flagship of the Saudi economy.
But against the backdrop of falling crude prices and regional tensions, the hopes of the authorities were revised downward and the valuation reached some 1.7 trillion dollars at the end of the subscription period.
By listing 1.5% of its capital on the stock market and raising $ 25.6 billion, Aramco made the biggest IPO in history on Wednesday and became the largest publicly traded company in the world, ahead of Apple and Microsoft .
- Pressure on investors -
Earlier in the day on Thursday, the valuation of the company has exceeded $ 2,000 billion.
The stock gained 15% on the first two trading days on the Tadawul, the benchmark of the Saudi Stock Exchange that operates from Sunday to Thursday in this Muslim kingdom and ended the week down (-1.57%) .
At its first trading day on Wednesday, Aramco stock rose 10% - the maximum allowed in one day on the Ryad Stock Exchange - from 32 riyals ($ 8.53, initial price) to 35, 2 riyals ($ 9.39) and bringing the valuation of the company to 1.880 billion dollars.
The Ryad Stock Exchange has been included in the ranking of the top ten global stock markets.
Unlike Wednesday, when trade was limited, Tadawul had one of its busiest days on Thursday, with 418 million Aramco shares traded for more than $ 4.23 billion.
After having erected the purchase of shares for patriotic duty before the oil giant's IPO, the authorities are now trying to push wealthy families and institutions across the country to buy shares in circulation in order to inflate the price and to reach the goal of $ 2 trillion, according to the Financial Times.
To persuade investors to participate in the deal, Aramco has promised annual dividends of $ 75 billion until 2024.
Thanks to an unprecedented media hype, the authorities have also used the patriotic and religious fiber to encourage Saudi citizens to buy shares.
- Reform plan -
Long delayed, the IPO of Aramco is part of a plan of economic and social reforms to remove the economy of Saudi Arabia from its heavy dependence on crude exports.
The income generated by the IPO must be injected into infrastructure megaprojects in the fields of tourism or entertainment in this ultraconservative realm.
Ryad is also looking to fill an abyssal budget deficit dug for five years by the fall in the price of black gold, the country deriving 80% of its government revenue from the export of crude oil.
The most skeptical analysts believe, however, that the proceeds of the operation will barely cover the budget deficit of the kingdom for a year.
In April, Aramco opened its accounts for the first time, announcing a net profit of $ 111.1 billion in 2018, up 46% over the previous year, and an annual income of $ 356 billion.
In August, the Saudi juggernaut announced a profit down 12% in the first half of 2019, due to falling oil prices.
© 2019 AFP