Saudi Aramco’s $12 billion share sale has quickly sold out, showcasing strong demand from investors. The deal opened on Sunday and within a few hours, the government received orders for all shares on offer. This rapid uptake is a positive development for the government as it seeks funds to support its ambitious economic transformation plan.
The offering attracted a mix of local and foreign investors, indicating broad interest in Saudi assets. Foreign participation will be closely monitored, especially after overseas investors were hesitant during Aramco’s 2019 initial public offering. The $29.4 billion listing garnered significant demand, with about 23% of shares allocated to foreign buyers.
One of the key selling points of the current offer is the opportunity to access significant dividends. Investors stand to benefit from a $124 billion annual payout, which translates to a dividend yield of 6.6% for the company.
The Saudi government, which currently owns around 82% of Aramco, plans to retain its position as the main shareholder even after the sale. Crown Prince Mohammed bin Salman had previously hinted at future share sales, and the latest offering is part of the ongoing strategy to diversify the economy and raise funds for various initiatives.
The government’s efforts to raise cash also extend to international debt sales, which have yielded $17 billion this year, making Saudi Arabia the top performer among emerging-market sovereigns. The government’s focus on generating revenue aligns with its push to fill a budget deficit and pursue economic diversification.
The successful share sale coincides with a period of strong demand for new listings in Saudi Arabia, reflecting investors’ interest in the region. The government is working with a consortium of banks to facilitate the sale, emphasizing its commitment to financial transparency and strategic partnerships.
Overall, the speedy sell-out of Saudi Aramco’s share offering underscores investor confidence in the company and the government’s economic vision. The proceeds from the sale will support Saudi Arabia’s long-term goals, including the development of key sectors like artificial intelligence, sports, tourism, and infrastructure projects like Neom.
