Saudi Arabia’s King Salman bin Abdulaziz (Bandar AL-JALOUD)

Riyadh (AFP) – Saudi Arabia’s King Salman said Wednesday that oil giant Aramco’s planned IPO will attract investment and create thousands of jobs, in his first comments on the blockbuster stock market listing.

Riyadh on Sunday put a value of up to $1.71 trillion on Aramco as it said it would sell 1.5 percent of the company in an initial public offering worth $24-25.6 billion — potentially the world’s biggest.

The listing “will allow investors inside and outside the kingdom to contribute to this leading company, allowing for investments and creating thousands of jobs”, the king said in his annual address to the consultative Shura Council, according to the foreign ministry.

“It will enhance the size of Saudi Arabia’s financial market to the ranks of global markets, as well as enhance transparency and the governing system of the company, in line with international standards.”

The much-delayed offering, a cornerstone of Saudi Crown Prince Mohammed bin Salman’s ambitious plan to diversify the oil-reliant economy, could exceed the world’s biggest IPO — the $25 billion float of Chinese retail giant Alibaba in 2014.

The firm has said there are no current plans for an international stock sale and the IPO seems to be banking on local demand, with one-third of the shares reserved for Saudi retail investors.

Even for the domestic listing though, there are reports the firm is struggling to attract foreign institutional investors, amid uncertainties in energy markets and questions over company disclosures and governance.

The launch has been dogged by delays since the idea was first announced in 2016, with Prince Mohammed’s desired company valuation of $2 trillion meeting with scepticism from investors and analysts.

The bulk of the funds raised from Aramco’s IPO will go to the government’s vast Public Investment Fund (PIF), the kingdom’s main investment vehicle.

The PIF seeks billions of dollars to finance the kingdom’s transformation from a petro-state to a tech-focused economy.

It has taken radical steps to boost its treasure chest to finance a host of big-ticket, non-oil investments — from risky high-tech startups such as Uber to the $500-billion NEOM mega city to be built in the kingdom’s northwest.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.