Connect with us

    Hi, what are you looking for?


    Extraordinary $12 Billion Capital Demand for Saudi Aramco Evident

    Eager investors quickly claimed all available shares in Saudi Aramco’s recent $12 billion equity offering, demonstrating strong enthusiasm from regional and global investors alike. The sought-after shares were allocated within just a few hours, with individual share prices ranging from 26.70 to 29 riyals.

    While precise data regarding the proportion of shares acquired by international investors remains undisclosed, those privy to the transaction details have indicated a diverse mix of participants. The significant degree of international engagement is quite apparent, showcasing the broad allure of Saudi investment opportunities. It’s worth recalling that during the company’s initial public offering in 2019, approximately 23% of shares were purchased by international investors, with the remainder being taken up by national investors.

    A compelling dividend yield is at the forefront of Aramco’s appeal for this issue, with Bloomberg Intelligence forecasting a notable $124 billion in annual dividends, equivalent to a yield of roughly 6.6%. Such an attractive prospective payout is likely to soothe any concerns related to the organization’s valuation and the absence of a reacquisition scheme for shares.

    The timing of the share dispatch coincides with a crucial assembly of OPEC+ members, where consensus was reached to extend production curtailments until 2025, with some easing of limits anticipated toward the year’s end. These arrangements may afford Saudi Arabia the leeway to adapt Aramco’s production limits, potentially bolstering its future output prospects.

    Despite the considerable triumph of the share dispensation, Aramco’s stock value declined by 1.9% on Sunday, positioning the company’s market capitalization around $1.8 trillion. The shares have declined by 14% since the commencement of the year, mirroring the market’s reaction to the state’s plans to divest a portion of its interest in the firm. Presently, Aramco’s stocks are hovering at a minimum, a figure not witnessed in over twelve months.

    The primary holder in Aramco continues to be the Saudi government, retaining ownership of about 82% of the firm, while the kingdom’s sovereign wealth fund possesses a 16% stake. Crown Prince Mohammed bin Salman has insinuated the intention to sell additional shares of Aramco, with such aspirations becoming increasingly pronounced over the past year.

    Image Source: rafapress / Shutterstock

    You May Also Like


    Previously, in April, the CEO of Tesla and SpaceX, Elon Musk, caused quite a stir by revealing his intentions to procure the entire social...


    Concerns about rising prices are impacting the entire economy of the United States, and one sector that is particularly affected is the real estate...


    With rising expenses in fuel and power worldwide, particularly in the United States, the quest for sustainable energy sources has intensified. A significant historical...


    Kellogg, a major supplier of packaged foods in the United States and globally, has maintained overall centralized control of all its owned labels during...