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The $12-billion secondary share offering of Saudi oil giant Aramco has drawn strong demand from foreign investors, sources with knowledge of the matter told Bloomberg on Thursday.
Saudi Aramco launched on Sunday a secondary public offering of 1.545 billion shares of the company, representing approximately 0.64% of the company’s issued shares.
Aramcos’s share offer sold out in hours after opening on 2 June, Bloomberg reported on Sunday.
Currently, the Saudi government owns about 82% of Aramco, while the sovereign wealth fund of Saudi Arabia, the Public Investment Fund (PIF), has around 16% of the oil giant.
Potential investors in the fresh share sale have to submit offers by Thursday, June 6, and according to Bloomberg’s sources, interest from foreign investors has been high, unlike in Aramco’s IPO back in 2019, when mostly Saudi investors were allocated shares.
Saudi Aramco made its debut on the Saudi Stock Exchange in December 2019 and raised around $30 billion in a share listing which became the world’s largest ever.
Since the IPO, the Saudi rulers, including Crown Prince Mohammed bin Salman, have said on several occasions there would be more Aramco shale sales in the future.
The secondary offering is enjoying high interest both domestically and from foreign investors, according to Bloomberg’s sources.
Western and Asian investors alone have submitted enough bids that would exceed the offering, the anonymous sources told Bloomberg.
Demand from foreign investors will be carefully gauged by market analysts to see if the Saudi oil giant has managed to draw interest from abroad this time, after the little enthusiastic foreign investors during the IPO in 2019.
Aramco’s massive dividend could be attractive for foreign investors, despite the lack of share buybacks at the world’s largest oil company and top crude exporter, Bloomberg notes.
Aramco’s dividend yield is estimated at 6.6% for 2024, one of the highest compared with the international supermajors, according to Bloomberg Intelligence. Aramco and Eni’s dividend yields for 2024 are the highest, at 6.6%, followed by BP’s 4.7%, TotalEnergies’ 4.6%, and Shell’s 3.9% dividend yield.
