Mohammed H. AlQahtani’s Post

#FIIInterviews You can now watch our first interview with Asharq Business اقتصاد الشرق Happening in #FII8 by the FII Institute in Riyadh, powered by Public Investment Fund (PIF) and aramco

🌟 Selling Saudi Aramco shares has different insights and implications for leverage and interest, especially from an investment point of view: ⭐️ For Saudi Arabia and Aramco: 1 Increased foreign investment: Allocating approximately 60% of the shares to foreign investors significantly increases international investment in Aramco. This strengthens Saudi Arabia's financial and economic ties with global markets, which could benefit geopolitical influence and fundraising in the future. 2. Economic diversification: Revenues of $11.2 billion could support Saudi Arabia’s Vision 2030 initiative, which aims to diversify the economy away from dependence on oil. This funding can be directed towards different sectors, including tourism, entertainment, and technology. ⭐️For foreign investors: 1. High dividend yield: Aramco's dividend yield, estimated at 6.6%, is very attractive. With an annual payout of $124 billion, investors are attracted to the potential for consistent and significant returns. 2. Global Energy Exposure: Investing in Aramco provides exposure to one of the largest and most profitable oil companies in the world, which can be a strategic asset in a diversified investment portfolio. For institutional investors, adding Aramco shares diversifies their holdings geographically and by industry sector. 🌟 Economic analysis: 1. Demand and Price: Strong demand, reflected in $65 billion worth of orders, indicates rising investor confidence despite the large valuation. However, final pricing towards the lower half of the suggested range indicates a balance between investor expectations and market conditions. 2.Market Effect: The initial decline and subsequent stabilization of Aramco shares after the sale reflects market adjustments to the new supply of shares. This stability is critical to maintaining investor confidence and market balance. ⭐️Portfolio Management Perspective: 1 Risk assessment: This would evaluate the political and economic stability of Saudi Arabia, the volatility of oil prices, and the long-term sustainability of Aramco’s dividend policy. Despite the attractive return, these factors can affect the total risk. 2. Portfolio Strategy: Given energy investments' high return and strategic importance, portfolio management may consider Aramco shares a valuable addition to a diversified portfolio, balancing high risks with high potential returns. ⭐️ Investor’s view: 1. Return on Investment: The main attraction for investors is the dividend yield and potential capital appreciation. Investors need to balance this against oil price volatility and geopolitical risks. 2. Market impact: Since international institutional investors now own about 0.73% of Aramco, their influence on company decisions and market perceptions could be significant. 🌟 In short, allocating 60% of Aramco shares to foreign investors represents a strategic step to enhance international participation, diversify sources of financing, and support economic transformation.

ACWA Power's reported plan to raise SAR7.1 billion (US$1.9 billion) through issuing stock to existing shareholders could further boost the Public Investment Fund (PIF)'s as it strides towards a US$1 trillion portfolio – meanwhile, aramco’s recent secondary offering poses some downside risks for the Saudi state and the economy's long-term diversification. Global SWF analyses how ACWA's plans fit into the Vision 2030 agenda, the growing weight of domestic and liquid assets in PIF's portfolio, and the risks posed to diversification from Aramco's huge dividends that PIF and the government remain heavily reliant upon. https://lnkd.in/eHkSC7i6

MENA Equity Capital Markets Show Remarkable Growth in 2024 In the first nine months of 2024, MENA equity capital markets (ECM) secured $21 billion through equity and equity-related issuances, reflecting an impressive 154% increase compared to the same period last year. This figure represents the highest total for the first three quarters since 2008, primarily driven by a $12.3 billion stock sale from Saudi Arabia’s Aramco. The number of issues rose by 11%, with initial public offerings (IPOs) making up 24% of the overall activity and follow-on issuances constituting 76%. A total of 30 IPOs raised $5.0 billion, which is 28% lower than the total amount raised last year. Among the significant transactions, the UAE’s NMDC Energy raised $876.7 million in its debut on the Abu Dhabi Securities Exchange, making it the largest IPO in the region for the first nine months of 2024. The energy and power sector was the most active, amassing $14.3 billion, which accounted for 68% of total equity capital raised. The retail sector followed, contributing 12%. As the MENA ECM continues to demonstrate strong momentum, what impact will this growth have on the investment landscape in the region going forward? #ECM #CapitalMarkets #IPOs #AwadCapital

🇸🇦💰$20bn ARAMCO FPO TO EXPEDITE NEW REGULATORY FRAMEWORK IN SAUDI ARABIA? ⭐️Until now FPOs (post-IPO follow-up public offerings) on the Saudi stock exchange (Tadawul) have not benefited from a dedicated regulatory framework. That could be about to change as the CMA and Tadawul consider introducing a new regulatory framework specific to FPOs. 💵This is great timing given the increase in Saudi FPOs we are seeing - from the $3.2bn Saudi Telecom FPO in 2021 to the imminent $20bn Aramco FPO! 💡The EY Law Financial Services team has extensive experience of advising Qualified Foreign Investors (QFIs) on investing in Saudi IPOs…it will be interesting to see how the proposed new framework impacts QFI ability to invest in FPOs. WATCH THIS SPACE…. 👀 #eylaw #eyfinancialservices #betterworkingworld #saudiaramco Ahmed Butt احمد طاهر بٹ Luisa R. Geiling

Three Middle East wealth funds are close to the $ 1 Trillion mark They are Abu Dhabi Investment Authority (ADIA) (US$993 billion). Saudi Arabia's Public Investment Fund (PIF) (US$940 billion) and Kuwait's Kuwait Investment Authority (Us$ 923 billion) #AbuDhabi is home to three #wealthfunds — Abu Dhabi Investment Authority (ADIA), Mubadala and ADQ. #AbuDhabi is among few globally that manage about US$1.5 trillion in #sovereignwealthfunds capital. Saudi Arabia recently transfered a US$164 billion (RM767.72 billion) stake in aramco to the Public Investment Fund (PIF), The Kuwait Investment Authority is on track for one of its best fiscal years on record.

Public Investment Fund (PIF) has ascended to fifth place among global sovereign wealth funds, with net assets reaching $861 billion. The recent acquisition of an additional 8% stake in Saudi Aramco has notably enhanced PIF's investment capacity, aligning with the Kingdom's vision of diversifying income streams. This move underscores PIF's strategic commitment to driving economic diversification and growth in line with #SaudiVision2030 https://buff.ly/3TvMTZk #PIF #swf #saudiarabia #investments

Aramco will allocate about 60% of its secondary share sale to foreign investors due to high international demand, surpassing its 2019 IPO. The shares start trading on Tadawul today, with excess funds refunded by June 11. Reuters reported over 50% of shares went to foreign investors from the US, UK, Hong Kong, and Japan, adding over 120 new foreign investors. Demand exceeded $65 billion globally. Aramco set the final share price at SAR 27.25, aiming to raise around $11.2 billion. The offering, 4-5 times oversubscribed, is the highest value globally in three years. A greenshoe option could increase the total to $12.4 billion. The Saudi government, holding 82% of Aramco, aims to diversify income sources and fund large projects. Proceeds will likely go to the Public Investment Fund (PIF), which owns 16%. The follow-on offering sold out quickly, with 90% to institutional investors and 10% to retail. It complied with Regulation S, facilitating global participation, and impacted market liquidity amid oil production cuts. aramco

On Aramco's upcoming share offering, I told Hadeel Al Sayegh at Reuters that 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 equity in Aramco and to debt issuances to raise funds. This is meant to allow the kingdom to finance its large domestic projects. Saudi Arabia is likely to continue redirecting capital to other sectors including renewable energy, technology, tourism, logistics and manufacturing, which Riyadh hopes will constitute sources of long-term economic growth.

#SaudiArabia and #UAE propel regional M&A activity in H1 to hit $49.2bn. The analysis reveals that 10 of the MENA region’s highest-valued M&A transactions in early 2024 were concentrated in the Gulf Cooperation Council countries. The report highlights Saudi Public Investment Fund (PIF) sovereign wealth fund's leading role in the region’s deal activity. https://arab.news/p84cg #MENA #MergersAndAcquisitions #BusinessEconomy