Investing.com - Saudi Aramco (TADAWUL:2222) successfully sold shares worth $12 billion shortly after trading began on Sunday, just hours after the order book building process started, according to Bloomberg.
The agency added that the offering was covered within the price range of 26.70 to 29 riyals.
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While it was not immediately clear how much of the demand came from foreigners, the order book reflects a mix of local and foreign investors, according to three people familiar with the matter, Bloomberg reported.
Trading on the deal began on the same day that OPEC+ met to discuss oil production policy. The group agreed to extend production cuts until 2025, with some of those restrictions easing later this year. This would allow Saudi Arabia to ease production restrictions on Aramco.
Aramco shares fell 1.9% on Sunday, but are now up about 0.35% to 28.55 Saudi riyals. The stock has fallen about 14% since the beginning of this year.
The Saudi government owns about 82% of Aramco, while the Saudi wealth fund holds a 16% stake. Thus, the Kingdom will remain the primary shareholder after the offering, which has been in the works for years.
Crown Prince Mohammed bin Salman said in 2021 that the government aims to sell more Aramco shares in the future.
The deal is among the largest stock sales globally since Aramco's listing. The proceeds will help finance initiatives and projects to diversify the economy under the Kingdom's Vision 2030.
The deal coincides with a period of strong demand for new stock sales in Saudi Arabia. In recent weeks, four companies attracted $176 billion in orders for their initial public offerings, as fund managers flocked to deals offering nearly guaranteed returns over the past two years.
Promotional Campaigns
On the other hand, senior executives of Saudi Aramco are set to hold a series of events in London and the United States to boost demand for the $12 billion share sale, after a five-year hiatus from international roadshows for its initial public offering, Bloomberg reported.
Aramco CEO Amin Nasser will be among the officials attending at least one event in London this week, according to the agency. CFO Ziad Al-Murshed is scheduled to participate in a promotional campaign in the city over the coming days.
The sources told the agency that the company is planning a separate event in the United States, where institutional investors can submit orders until June 6 to purchase shares offered for sale starting from Sunday.