Photo: The Canadian Press

Saudi Arabian oil company Aramco surpassed Apple as the world's most valuable public company Wednesday when its shares made their debut on the Saudi stock exchange, part of an ambitious shift away from the very fossil fuels the country's economy depends on.

The shares' 10% rally brought state-owned Aramco's value to $1.88 trillion. The 1.5% of the company that is listed has raised $25.6 billion, a record for an initial public offering. As of Tuesday's close in the U.S., Apple was valued at $1.19 trillion.

Despite the success of the sale, the kingdom's decision not to list the company on a larger foreign exchange points to concerns that a global flotation would raise. Listing shares outside Saudi Arabia would open up the company to greater disclosure rules and expose it to foreign laws at a time when the country is under scrutiny for its role in regional conflicts as well as for the killing of a dissident journalist.

“A local Saudi offering is, by all accounts, a friendly audience of Saudi investors,” said Gianna Bern, the author of "Investing in Energy" and lecturer at the University of Notre Dame. She said the real test for Aramco will be a global offering, in another jurisdiction, such as London or Asia. Aramco, however, has said it will not sell more shares for at least another year.

Wednesday's shares were sold mainly to investors in the region: a 0.5% stake to individual retail investors in Gulf Arab states and 1% to institutional investors.

Non-Saudi investors contributed just 23% of the institutional investment generated in the IPO, according to lead adviser Samba Capital. Saudi companies and government institutions raised 51% of the overall demand, Samba Capital said.

Some analysts said that the surge on the first day of trading suggests heavy buying from investors close to the crown prince to make the operation a hit.

Zachary Cefaratti, chief executive officer of Dalma Capital, which manages Saudi equity funds that invested in Aramco, said the company could on day two of trading become the first in the world valued at over $2 trillion if the stock gains another 10%.

“A lot of international investors have felt that there should be a discount to Aramco shares due to perceived geopolitical risk. We actually believe geopolitical risk in Aramco is overstated and that the recent September 14th attacks actually demonstrated Aramco's resilience.” Cefaratti added.

The shares rose sharply in the first moment of trading Wednesday to hit the 10% limit on stock price fluctuation allowed by Saudi regulators. That pushed the price to 35.2 riyals, or $9.39 a share, where it held until closing at 3 p.m.

Crown Prince Mohammed bin Salman plans to use the money raised from the sale of a sliver of the kingdom's crown jewel to diversify the country's economy and fund major national projects that create jobs for millions of young Saudis entering the workforce.

The sale raises capital for the Public Investment Fund overseen by Prince Mohammed, but it is only part of a much larger transformation program to move the economy away from reliance on oil exports for revenue.