Saudi Aramco touches $2 trillion goal despite earlier valuation doubts

Aramco became the world's biggest IPO last week by raising $25.6 billion - more than the $25 billion raised by Alibaba in 2014. (File/AFP)
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Updated 12 December 2019

Saudi Aramco touches $2 trillion goal despite earlier valuation doubts

  • Aramco shares advanced to as much as SR38.70L ($10.32), lifting its valuation above $2 trillion and closing at SR36.80
  • The stock hit the maximum allowed in a trading session on its debut on Wednesday

LONDON: Saudi Aramco shares roared ahead again on Thursday taking the world’s biggest company close to the coveted $2 trillion valuation that some analysts had suggested was unrealistic before its market debut this week.
Aramco shares advanced to as much as SR38.70L ($10.32), lifting its valuation above $2 trillion and closing at SR36.80 — up 4.5 percent on Wednesday when the shares climbed by the maximum 10 percent allowed in a session.
The Aramco buying frenzy appeared to have sucked some liquidity from the wider market which closed about 1.6 percent lower.
“Initial price action has validated our thesis that Aramco discounted its IPO price to leave upside on the table and allow regional investors to benefit from the listing of its crown jewel,” Dubai-based Dalma Capital said in a note on Thursday.
Oil prices also gained on Thursday as OPEC forecast a supply deficit in 2020 and the US Federal Reserve said the economic outlook was positive.
Brent crude gained 45 cents, or 0.7 percent, to $64.17 in afternoon trade in London despite a report from the International Energy Agency (IEA) that predicted a sharp rise in global stocks despite the latest agreement by OPEC and its allies to further cut production.
The Aramco share sale took place at a turbulent time for the global oil industry, increasingly under the spotlight because of its greenhouse gas emissions. At the same time, a global supply glut caused in part by the growth of the US shale oil sector has dampened investor sentiment toward the sector. Plans for the share sale faced a further shock in September when Saudi Aramco’s main oil processing facility in Abqaiq was hit in a drone attack.
Despite the unfavorable global market mood, the Saudi government pressed ahead with the sale that has long been a cornerstone of the Kingdom’s efforts to modernize its economy and develop its financial sector.
It is expected to be followed by more privatizations as Saudi Arabia seeks to curb its budget deficit.
Announcing the Saudi budget earlier in the week, Finance Minister Mohammed Al-Jadaan said that the proceeds from the Aramco IPO would be reinvested, helping to create more revenue channels for the government.


Japan’s ANA Holdings says buying 20 more Boeing 787 Dreamliners

Updated 25 February 2020

Japan’s ANA Holdings says buying 20 more Boeing 787 Dreamliners

  • The price tag for the purchases was not disclosed
  • Planes expected to go into service between financial years 2022 and 2025

TOKYO: Japan’s ANA Holdings said Tuesday it will buy 20 new Boeing 787-10 and 787-9 aircraft, with the planes expected to go into service between 2022 and 2025.
The order will be made up of 11 787-10 aircraft, which will serve domestic routes, and nine 787-9 planes for international destinations.
The price tag was not disclosed.
All Nippon Airways has been gradually replacing its Boeing 777s with 787s, citing better fuel efficiency and a reduction in noise emissions.
Once all 20 of the newly ordered planes go into service, ANA will operate some 103 787s, the firm said.
“Boeing’s 787s have served ANA with distinction, and we are proud to expand our fleet by adding more of these technologically advanced aircraft,” said Yutaka Ito, executive vice president of ANA and ANA Holdings, in a statement.
“These planes represent a significant step forward for ANA as we work to make our entire fleet more eco-friendly and to reduce noise output,” Ito added.