Saudi Arabia may announce landmark Aramco share sale today: Report

Saudi Arabia may announce a landmark secondary share offering in oil giant Aramco later on Thursday, pending final approval from Crown Prince Mohammed bin Salman, people with knowledge of the matter said.

may announce a landmark in Aramco later on Thursday, pending final approval from , people with knowledge of the matter said.

The share offering on , which the sources said is expected to be launched on Sunday, is the culmination of a years-long effort to sell another chunk in one of the world's most valuable companies after its record-setting in 2019 raised $29.4 billion.

Sources told Reuters last week the offering could happen as soon as June, with one adding it could raise around $10 billion.

Since the IPO, has continued to be a cash cow for the Saudi government as it finances a mammoth economic drive to end its "oil addiction", as the crown prince once called it.

The current deal will allow the kingdom to finance large domestic projects tied to that agenda, said Hasan Alhasan, senior fellow at the International Institute for Strategic Studies.

Having missed its target for foreign direct investment and with a budget deficit of up to $21 billion in sight, "the kingdom is resorting to the sale of in Aramco and to ", he said.

"The kingdom is likely to continue redirecting to other sectors including renewable energy, technology, tourism, logistics and manufacturing, which Riyadh hopes will constitute sources of long-term ," he added.

Aramco shares closed 0.17% lower on Thursday at 29.1 riyals ($7.76) to give it a of about $1.87 trillion. Its IPO price valued it at $1.7 trillion, but shares traded 10% higher on their debut, roughly in line with its current valuation.

The company lifted dividends to almost $98 billion in 2023 from the $75 billion it had been paying annually, despite profit having dropped by nearly a quarter. It expects an outlay of $124.3 billion this year.

Aramco has also invested in refineries and petrochemical projects in China and elsewhere, expanded its retail and trading businesses, and sharpened its focus on gas, making its first foray into liquefied abroad last year.

Banks including Citi, Goldman Sachs, and HSBC are managing the sale, Reuters has previously reported.

DIVERSIFICATION DRIVE

Saudi Arabia's de-facto ruler MbS, as the crown prince is known, has poured hundreds of billions of dollars through the kingdom's sovereign wealth fund into mega projects, and everything from electric vehicles to sports and a new airline, to diversify the economy away from hydrocarbons and create jobs.

But lower oil prices and production weighed on economic growth last year while spending rose, leading to a of around 2% of GDP, with a similar deficit expected this year.

Aramco introduced a special performance-based last year, providing cash to the kingdom and helping to lure new investors. It offered $31 billion in dividends for the first quarter, a 59% boost from the first three months of 2023 even as profit declined 14% in the same period.

The company has also signed up more banks as market-makers to help improve in the shares.

The world's biggest oil exporter trades at a higher price-to-earnings ratio than other global oil companies, including ExxonMobil, BP and Shell.

The stock is down about 12% this year, while shares of ExxonMobil and BP are up around 4% and 14% respectively.

Saudi Arabia is the de facto leader of the , helping engineer price moves on world oil markets.

Aramco currently produces about 9 million barrels of crude a day, about three quarters of its maximum capacity, to comply with output cuts agreed by and its allies, known as OPEC+.

OPEC+ is set to decide its next production policies on Sunday, and several sources and analysts expect the meeting to roll over existing cuts into the second half of 2024.

Should OPEC+ surprise the market and cut production further, oil prices could rise from the current roughly $83 a barrel, but Aramco would have to reduce output and face even lower revenues.

($1 = 3.7506 riyals)

Source: Stocks-Markets-Economic Times

Publicații recente
Stock Market Today: Dow, S&P 500 ride Nvidia surge to close at fresh record highs
25.09.2024 - 00:00
Paycom CEO sells over $668k in company stock
25.09.2024 - 00:00
Smart Global Holdings EVP sells shares worth over $266k
25.09.2024 - 00:00
Ascent Industries VP buys $18,840 in company stock
25.09.2024 - 00:00
Dell executive sells shares worth nearly $5 million
25.09.2024 - 00:00
Entergy COO sells over $1 million in company stock
25.09.2024 - 00:00
Biden administration taking hands-off approach to US port talks, administration official says
25.09.2024 - 00:00
Stitch Fix shares plunge 13% on earnings miss, weak guidance
25.09.2024 - 00:00
AnaptysBio chief medical officer sells shares worth over $58,000
25.09.2024 - 00:00
Forza X1's interim CFO buys shares worth $389
25.09.2024 - 00:00
KB Home misses earnings expectations, stock falls 5% on weak guidance
25.09.2024 - 00:00
Algorhythm Holdings executive sells over $10,000 in company stock
25.09.2024 - 00:00
Canada stocks higher at close of trade; S&P/TSX Composite up 0.24%
25.09.2024 - 00:00
Brazil stocks higher at close of trade; Bovespa up 1.20%
25.09.2024 - 00:00
Bowman consulting executive Patricia Mulroy sells shares worth over $16k
25.09.2024 - 00:00

© Analytic DC. All Rights Reserved.

new
Prezentare generală a pieței Sentimentul consumatorilor din SUA a scăzut în septembrie
Bine ați venit în mesageria de suport!!
*
*

Solicitarea dvs. a fost trimisă cu succes!
Veți fi contactat în scurt timp.