Shares of Saudi Aramco advanced for the third consecutive session, even as market valuation held under $2 trillion, as investors focused on including them in major international equity indexes. The pricing of its attractive IPO was set to coincide with the most recent OPEC meeting, which was scheduled for December 5th. The previous meeting was in July.
Specifically, the stock climbed 1.6 percent, in Riyadh, with gains starting on Wednesday at 1.7 percent. The main Saudi index also buoyed up, as did most of the other Middle East outlets, who are all now catching up with global markets following the US and China finally reaching a phase-one trade deal agreement.
You may recall that Crown Prince Mohammad bin Salman predicted this would happen, back in 2016, but analysts warn that investors should be skeptical about the rise. Analysts note that Saudi Arabia has been motivated to manipulate the price of oil for a long time, making various production adjustments among the OPEC cartel. Thus, some now suggest—and to no surprise—that the share price of Saudi Aramco has been subsequently manipulated.
Indeed, Saudi Aramco is a much easier target for manipulation than the global price of crude.
Officially known as Saudi Arabian Oil Co, Aramco allowed investors buy only 1.5 percent of its existing stock; and even that tiny amount led to the initial public offering of more than $25 billion. On top of that, most of the buyers live within the kingdom or the region and some had been motivated by Saudi leaders to buy these shares.
It may also be important to note that Aramaco is the largest and most profitable [oil] company in the world. That said, this recent valuation faced much skepticism from international investors, just at the IPO went to market.