Saudi Arabia successfully sold shares in oil giant Aramco, raising over $11.2 billion. The sale, priced towards the lower end of expectations, is intended to fund government spending plans and attract foreign investment.
Foreign investors showed stronger than anticipated interest in the Aramco offering, exceeding participation in the company’s record-breaking 2019 IPO. Proceeds from the sale are expected to be directed to the Public Investment Fund (PIF), which finances Saudi Arabia’s ambitious diversification projects.
The need to diversify away from oil dependence and potential budget deficits due to lower oil prices were cited as reasons for the share sale. The Aramco offering comes as OPEC and its allies agreed to a gradual increase in oil production, potentially impacting future prices.
Despite being priced at a discount to Aramco’s current stock price, the sale is seen as a positive step for Saudi Arabia’s economic transformation plans. The shares are expected to begin trading on the Saudi Exchange next Sunday.
Source: Reuters