Oil giant Saudi Arabian Oil Co (Saudi Aramco) yesterday said that international investors had snatched up the bulk of shares sold in its latest offering, which was set to raise US$11.2 billion.
The secondary offering was expected to provide a short-term boost to Saudi Arabia's finances as the Gulf kingdom builds large-scale projects including resorts and stadiums, part of a reform drive to prepare for an eventual post-oil future.
“The majority of the shares constituting the institutional tranche of the offering was allocated to investors located outside of the Kingdom,” the company said in a statement before shares were to begin trading on the Saudi Exchange as it reopened yesterday.
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Aramco ended trading yesterday at 28.60 Saudi riyals (US$7.63) per share, after opening at 27.95 riyals, giving it a market capitalization of around US$1.85 trillion.
Sources close to the situation said that about 58 percent of shares were allocated to international investors, up from about 23 percent for the company’s initial public offering in 2019, which was the biggest flotation in history.
The sources, speaking on condition of anonymity to discuss the private information, said that about 70 percent of orders outside the local market came from the EU and the US, while others came from Japan, Hong Kong and Australia.
Aramco, the mostly state-owned jewel of the Saudi Arabian economy, announced on May 30 that it would sell 1.545 billion shares, or approximately 0.64 percent of its issued shares, on the Saudi Arabian stock exchange.
It was widely seen as a test of foreign investor interest more than halfway through an economic reform drive known as Vision 2030, whose ambitions are reflected in so-called giga-projects such as Neom, a planned futuristic megacity in the desert.
Aramco on Friday said it would price its secondary offering at 27.25 Saudi riyals per share, at the low end of the range of 26.70 to 29 Saudi riyals announced on Thursday.
Saudi Arabia is the world’s largest crude oil exporter and the government’s stake in Aramco is about 81.5 percent after the second share sale.
The kingdom's sovereign wealth fund, the Public Investment Fund, and its subsidiaries control about 16 percent of the firm.
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