Saudi Aramco recently offered $12 billion worth of stocks, and these were quickly snapped up, with demand exceeding the available shares soon after the offer began. This stock offering is part of the Saudi government’s plan to transform the economy, attracting both local and foreign investors.
The shares were priced between 26.70 and 29 riyals each, though it’s not clear how much of the demand came from international buyers. This offering is different from Aramco’s initial public offering (IPO) in 2019, when most of the buyers were local due to a lack of interest from foreign investors.
One major attraction for investors is the prospect of substantial dividends. Aramco is expected to provide one of the world’s largest payouts, with a projected annual dividend yield of 6.6%. Even though some investors are worried about the company’s valuation and the fact that it isn’t planning any buybacks, the high dividends make it an appealing investment.
The timing of this stock offering is also notable because it coincided with OPEC+ discussions on oil output policy. There are signs that these talks might lead to a relaxation of output restrictions on Aramco, which could benefit the company.
Despite a recent drop in Aramco’s stock value, this offering is seen as a significant move in Saudi Arabia’s efforts to diversify its economy beyond oil. The successful uptake of shares shows strong investor confidence and interest in the company’s future prospects.
