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Saudi Oil Giant Aramco Could Sell More Stock Under Right Market Conditions

Saudi Arabia’s oil giant, state-held Aramco, could think about selling more of its shares under the right market conditions, the governor of the Kingdom’s Public Investment Fund (PIF) said on Tuesday.

Yasir Al-Rumayyan, head of Saudi Arabia’s sovereign wealth fund, was discussing the fund’s new strategy for 2021 through 2025 during a news briefing, as carried by Reuters.

PIF’s program 2021 – 2025 targets to raise the fund’s assets under management to US$1.07 trillion, and invest 21 percent of its assets in new and growth sectors.  

If the Saudi fund reaches the US$1.07 trillion assets by 2025, it would be one of the largest sovereign wealth funds in the world. Currently, Norway’s Government Pension Fund Global, the so-called oil fund, is the biggest sovereign wealth fund in the world, with a total market value of US$1.22 trillion in 2020.

Saudi Arabia’s PIF had assets under management of around US$400 billion as of the end of 2020.

Selling more shares in Saudi Aramco could be a challenge for the Saudi fund and the Kingdom of Saudi Arabia, considering that the initial public offering (IPO) of the oil giant more than a year ago didn’t go as initially planned, and was delayed several times.

The Saudis were initially aiming to list Aramco on the Saudi stock exchange, Tadawul, and on one major international market, with London, New York, Tokyo, and Hong Kong all rumored or reported to have been in the race.

But in the end, tepid investor demand and the possibility of exposing the Kingdom to lawsuits—especially with a New York listing—forced the rulers to downsize the Aramco IPO.

Saudi Aramco made its debut on the Saudi stock exchange in December 2019. Saudi Arabia’s state oil giant had priced its IPO at the top end of the range—32 Saudi riyals ($8.53), which made the share listing the largest in history, surpassing the US$25-billion IPO of Alibaba on the New York Stock Exchange in 2014.

By Tsvetana Paraskova for Oilprice.com

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