This is good news for Mohammed Ben Salman, aka "MBS": Thursday, December 12, at the end of its first two trading days on Tadawul, the flagship index of the Riyadh Stock Exchange, oil company Saudi Aramco has reached 1 960 billion dollars (1,758 billion euros), close to the $ 2,000 billion set by the powerful Crown Prince of Saudi Arabia.
The day before, the title had gone up by 10%, the maximum allowed for the day. Bis repetita, Thursday, where he rose 4.6%. Riyadh thus enters the top 10 of the world stock exchanges. Should we really be surprised? Investors, most of them Saudi, have been urged to buy stocks to boost Aramco's share price, which represents the combined value of Apple and Amazon.
The company, which pumps 10% of the world's oil and holds the largest reserves, announced on December 5, to have raised $ 25.6 billion, more than the 25 billion raised on Wall Street, in 2014, by the Chinese giant online business Alibaba. At the price of 32 riyals ($ 8.53), it was worth $ 1,700 billion.
An "artificial" valuation
"Today, the Kingdom of Saudi Arabia is no longer the sole shareholder of the companysaid chairman of the board, Yasir Al-Rumayyan, who is also the head of the public investment fund for the funds raised. More than five million shareholders, including citizens and residents, as well as (Arabian Gulf) and international investment institutions have joined, a result of which the country "Can be extremely proud".
It remains that this valuation is judged "Artificial" by many analysts, regarding the governance of the company and the risks, particularly geopolitical, weighing on Saudi Aramco. To the point that analysts Sanford C. Bernstein & Co advise shareholders to sell as soon as possible to take their earnings.
The crown prince could not lose his face and wanted, whatever the cost, to succeed his bet to 2 000 billion
The valuation at the launch of the IPO is too high, judged several Wall Street banks retained to prepare this IPO. But the crown prince could not lose his face and wanted, whatever the cost, to succeed his bet to 2 000 billion. That's enough to give investors $ 75 billion in dividends per year until 2024. They felt that with such a valuation, their return on investment would be less than 4%, less than that offered by ExxonMobil, Shell, Chevron , BP or Total.
