Saudi Aramco Initial Public Offering – IPO

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The initial public offering (IPO) of Saudi Aramco was held on 11 December 2019. They had the plan for the offering back in 2016, but unfortunately, the company had to go through several investors calls, valuation and other corporate issues that led them to delay the date.

The firm has secured its position as the most valuable listed company in history after investor appetite pushed the market value of the firm to $1.9tn on the first day of trade. However, in addition to the IPO on the Saudi Stock Exchange, Armco may do a secondary listing for its bonds on either the London Stock Exchange or the New York Stock Exchange.

Trading the Saudi Aramco Shares

Following the listing of the Aramco shares on the Tadawul (Saudi Stock Exchange), it has become nearly impossible to purchase Saudi Aramco Stock for the average traders. The major and large institutional foreign investors have the chance to access the markets that Aramco offers.

Nonetheless, individuals and small traders can access Aramco and similar shares through reputable trading platforms. For instance, trading platforms like Q8trade allow investors to get started with Aramco trading without hassle. You can trade more than 12,000 international shares along with a variety of commodities, including oil. The most suitable choice would be opening an account in such trading platforms.

Furthermore, along with Q8 Trade, here are a few other IPOs that you can trade with:

  • IG
  • Asda
  • Deliveroo
  • Airbnb
  • ByteDance (TikTok)

 

The Value of Saudi Aramco

When the listing on Tadawul took place, the value of Saudi Aramco was at $1.88 trillion on that day. Shares glided at SAR32.00 and shot up to SAR35.20 upon the arrival of the posting – up by 10%. The company has sold a 1.5% share and managed to raise $25.6 billion.

The Reason Behind Saudi Aramco Went Public

Initially, Saudi Aramco was anticipating to open up to the world to raise capital for the kingdom’s sovereign wealth fund. The company expected to join the Public Investment Fund (PIF) also. However, they couldn’t join the PIF at the time. Instead, they started concentrating on their IPO so that they could diversify themselves to a greater extent. This approach helped them to make their mark on the marker. Aramco is now the largest company in the world by market capitalization.

The Perspective for Saudi Aramco

The perspective for Saudi Aramco is blended, as a couple of variables ought to be contemplated when anticipating the eventual fate of the organisation. The transient standpoint depends fundamentally on its introduction to oil and, in this manner, the price of the oil as well. In case there happens to be an uptrend, there will be a surge in the price of Saudi Aramco’s share. However, the standpoint of the long-term future will rely upon the organization’s capacity to broaden and move away from industry patterns.

There has been consistent development in the income of Saudi Aramco. The company has been successful in cutting its production costs. Moreover, they have significantly reduced their carbon footprint. If we have a look at the statistics, the net income of Saudi Aramco was $75.9 billion in 2017, and in 2018 it reached $101.1 billion. In the middle of 2019, the net income of the company was $46.9 billion, and they have already reduced the extraction costs of crude oil $7.50 per barrel. We are hoping that production in 2019 will reach up to 12.5 million barrels a day. Now we all can do is waiting for the other statistic to come.

About the Author

Thomas Wright is a digital market and financial analyst who often writes about investment and trading. After spending nearly a decade working in PR and marketing for multimillion-dollar brands and startups, Thomas knows what truly drives conversion. He holds a bachelors of science degree in business administration, specialising in both finance and accounting.

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