Shares will bolster the Public Investment Fund’s (PIF) strong financial position and high credit ratings in the medium term


Dubai: Saudi Arabia’s Crown Prince Mohammed bin Salman has transferred 4% of Saudi Aramco shares worth $80 billion to the kingdom’s sovereign wealth fund, the government said on Sunday.
The shares will bolster the Public Investment Fund’s (PIF) strong financial position and high credit ratings in the medium term, the crown prince said in a statement. The fund is the prince’s vehicle of choice to transform the Saudi economy and diversify away from oil revenues.
The state remains the largest shareholder in Saudi Aramco after the transfer process, as it retains more than 94% of the company’s shares, the statement said.
The transfer of existing shares would help to boost PIF’s assets under management, which are targeted to grow to about 4 trillion riyals ($1.07 trillion) by the end of 2025, it added.
“It supports the outlook for the PIF raising funds internationally, including bonds, and could potentially support a future Aramco share sale going forward,” Monica Malik, chief economist at Abu Dhabi Commercial Bank, said.
Saudi Aramco said in a statement the transfer was a private transaction between the government and the state fund. “The company is not a party to the transfer and did not enter into any agreements or pay or receive any proceeds from that transfer,” it said.
It said the move would not affect the number of issued shares nor the company’s operations, strategy, dividends distribution policy or governance framework.
It added that the shares transferred would rank equally among other existing ordinary shares.
Saudi officials had previously raised the possibility of Aramco share sales. The PIF did not comment.
The head of the sovereign wealth fund, Yasir al-Rumayyan, said last year that Saudi Aramco may consider selling more shares if market conditions are right, while the Wall Street Journal recently reported that the kingdom could target a stake sale of as much as $50 billion.
“The PIF is Saudi Arabia’s main vehicle to execute its 2030 vision, which suggests that this share transfer could imply further share sales down the line as a way to raise funds for the PIF to be reinvested elsewhere,” Yousef Husseini, associate director at EFG Hermes, said.
Aramco, the world’s biggest oil company, completed the world’s largest initial public offering in late 2019, raising $29.4 billion, with the proceeds transferred to the PIF.
Aramco’s shares are up just over 4% so far this year, valuing the company at $1.99 trillion, behind the world’s most valuable company, Apple Inc and Microsoft Corp. The shares declined 0.7% to 37.05 riyals at the close on Sunday.
After a sharp fall in energy prices in the early days of the pandemic, demand for oil is nearing pre-Covid levels with Brent crude trading around $94 a barrel amid concerns over tight global supplies.
Source: Reuters

Mashreq Digital Bank in Pakistan, Pakistanis in Emirates can send remittances for free
- 5 hours ago

3 cops killed in shooting in US state of Pennsylvania
- 5 hours ago

PM Shehbaz Sharif leaves for London after completing Saudi visit
- an hour ago

Saudi Arabia, Pakistan together against aggressor, forever and ever: Saudi Defense Minister
- 3 hours ago

Pakistan's first, most advanced coblation treatment for cancer launched
- 2 hours ago

Chairman PTA reinstated
- 7 minutes ago

Heavy rain in areas of Islamabad, Azad Kashmir
- 3 hours ago

Joint statement on state visit of PM Shehbaz to Kingdom of Saudi Arabia
- 5 hours ago

IBO in Khuzdar, four terrorists of Fitna-tul-Hindustan killed
- an hour ago

Prominent Kashmiri freedom fighter Abdul Ghani Bhatt passes away at 89
- 15 minutes ago
Pakistan’s BRICS membership likely by 2026: diplomatic sources
- 44 minutes ago

Taliban administration bans internet in Afghanistan
- an hour ago