Aramco Closes Below $2 Trillion as Stock Extends Decline
Shares fell as much as 2.5% to 36.80 riyals, before recovering a bit to trade at 37 riyals at 1:09 p.m. local time.
(Bloomberg) -- Shares in Saudi Aramco dropped for a second day in a row a week after its record initial public offering, pushing its market value just below $2 trillion, the level sought by Crown Prince Mohammed bin Salman.
Shares ended 2.8% lower at 36.70 riyals in Riyadh, giving the company a total value of $1.96 trillion.
The stock was included in the MSCI Emerging Markets Index and the main local benchmark, the Tadawul All Share Index, on Wednesday. A number of investors took this as an opportunity to sell a few of the shares bought in the IPO, said Marwan Haddad, senior portfolio manager at Emirates NBD Asset Management.
Aramco finished lower for the first time on Tuesday, ending the session down 0.7%. However, investors are still sitting on a 15% gain from the IPO price.
Aramco has been “a very liquid stock, and flows from foreigners buying on the index inclusion are getting absorbed easily,” said Vrajesh Bhandari, senior portfolio manager at Al Mal Capital, in Dubai. “The price should stabilize somewhere at this level, or a tad lower.”
To contact the reporters on this story: Kat Van Hoof in London at kvanhoof@bloomberg.net;Filipe Pacheco in Dubai at fpacheco4@bloomberg.net
To contact the editors responsible for this story: Blaise Robinson at brobinson58@bloomberg.net, Phil Serafino
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