Saudi Aramco’s shares closed at 35.2 riyals ($9.39) per share, with the company reaching a valuation of $1.88 trillion, bringing it closer to the $2 trillion valuation initially targeted by Saudi Arabian authorities.

 

The company’s shares shot up to hit the 10 percent fluctuation limit on the Saudi Stock Exchange (Tadawul) at opening and stayed there for the remainder of the trading session. Aramco was the biggest boost to Saudi Arabia’s main index, which rose 0.83 percent.

 

More than 31 million shares, valued at 1.11 billion riyals ($296.95 million), exchanged hands on the company’s first trading day.

 

Aramco is now the most valuable company in the world, ahead of Apple Inc, and larger than the five biggest energy majors combined.

 

Analysts expect the stock to rise again on Thursday, which could help it reach the desired $2 trillion valuation.

 

Following the stock’s better-than-expected performance on Wednesday, “we expect another good day [on Thursday] and the stock should be able to hit the $2 trillion market capitalization mark,” Vrajesh Bhandari, senior portfolio manager at Al Mal Capital said.

 

Saudi Aramco may float on the stock market at a valuation below the $2 trillion the Kingdom initially targeted, but it will soon rise above that level on the open market, the Kingdom’s energy minister, Prince Abdulaziz bin Salman, said last week.

 

The listing also moved the Tadawul up in global stock exchange rankings to within the top 10, the exchange’s head Sarah al-Suhaimi said.

 

The initial public offering (IPO) will enhance Aramco’s governance, transparency, operational excellence, and financial discipline, said Yassir al-Rumayyan, chairman of Saudi Aramco and Governor of the Public Investment Fund. He, along with al-Suhaimi, were among a group of senior executives to preside over the bell-ringing ceremony at the Tadawul.

 

Aramco set its IPO price at the top end of its indicative price range at 32 riyals per share ($8.53), raising $25.6 billion, and making it the largest IPO in history.

 

The listing is a cornerstone of Saudi Arabia’s Vision 2030 plan, which aims to wean the Kingdom off its reliance on oil and diversify the economy. The proceeds from the listing will go towards these diversification initiatives and could be invested in sectors such as logistics, mining, or developing the manufacturing and industrial economy.

 

The proceeds from the IPO could rise to $29.4 billion should the oil giant exercise an option to sell 15 percent more stock, a senior banker said on Monday.

 

Wassim al-Khatib, Head of Investment Banking at National Commercial Bank, said the so-called greenshoe option – a provision that grants the underwriter the right to sell more shares – could be implemented.

 

Investors have long been attracted to Aramco for its profitability and for having the lowest average cost of crude oil production in the world, at around $3 a barrel. It also sits on one of the biggest oil reserves in the world, about four times larger than those of its next biggest competitor ExxonMobil.

 

The company, which plans to pay a base dividend of $75 billion in 2020, reported a profit of $111.1 billion in 2018 and $46.9 billion in the first half of 2019.

 

The inclusion of the company would lead to the TASI – the main index - outperforming other developing countries in terms of profitability and shareholder returns, Aljazira Capital analysts wrote in a research note earlier.