"This is a successful IPO and the Aramco listing will add depth to the local market by providing exposure to a vital sector of Saudi Arabia's economy", said Bassel Khatoun, managing director, frontier and MENA at Franklin Templeton Emerging Markets Equity.
Aramco had priced the initial public offering at 32 riyals (US$8.53) per share, raising US$25.6 billion and eclipsing Alibaba's US$25 billion IPO of 2014 to become the world's largest. That could make yields competitive with the likes of Exxon Mobil Corp and Royal Dutch Shell Plc, but also threatens to strain the world's largest oil producer if prices fall.
Saudi energy minister Prince Abdulaziz bin Salman told Reuters last week he believed Aramco was worth more than its $1.7 trillion IPO valuation.
Aramco's shares began trading half an hour after the market open as the Saudi bourse allowed extra time for the "opening auction" period when investors place their bids, in anticipation of high levels of activity.
Saudi Arabia relied on mainly domestic and regional investors to buy Aramco shares after lukewarm interest from overseas.
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.
But the scaled-down listing is still a far cry from the blockbuster originally planned by Prince Mohammed.
The oil company raised a record $25.6bn from an initial public offering managed by Goldman Sachs but investors were only able to buy a paltry 1.5% of the company.
The government is now piling pressure on wealthy families and institutions to buy Aramco shares after trading begins in a last-ditch effort to reach the $2 trillion mark, the Financial Times reported on Tuesday. And the remaining percent is for institutional investors.
The proceeds of the Aramco deal alone are equal to more than a decade of IPOs on Tadawul, the Saudi stock exchange, which has already said that the company's weighting in the main local benchmark will be capped at 15 percent. Saudi government bodies accounted for 13.2 per cent of the institutional tranche, investing around US$2.3 billion, according to lead IPO manager Samba Capital.
The IPO process had put the energy giant's value at US$1.7 trillion, far ahead of other firms in the trillion-dollar club including Apple and Microsoft.
The strong demand for Aramco's stock, however, has so far been mostly supported by Saudi and some Gulf-based funds, rather than worldwide investors. Worldwide investors have remained sceptical about the secretive company's targeted valuation. Individual Saudi investors who hold their shares for six months from the first day of trading can also receive up to 100 bonus shares, or one for every 10 held.
With oil prices hovering around $63 a barrel, the kingdom needs a break-even oil price of $87 a barrel to balance its budget and climb out of the deficit, according to Monica Malik, chief economist at Abu Dhabi Commercial Bank.