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Saudi Arabia attracts over $11 bln in Aramco share sale, drawing strong foreign interest

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Saudi Arabia successfully placed over half of an $11.2 billion share sale in Aramco with foreign investors, marking a significant step in its ongoing effort to attract international investment and diversify its economy away from oil dependency.

This information was confirmed by two sources familiar with the transaction, as reported by Reuters on Saturday.

In its ambitious push to secure international capital, Saudi Arabia has targeted major projects aimed at economic diversification. Despite past difficulties in meeting foreign investment goals, the latest Aramco share sale indicates a growing global interest in the kingdom’s economic vision.

“There were multiple orders from the U.S., UK, Hong Kong, and Japan,” one source disclosed, noting that the international demand for this secondary share sale surpassed that of Aramco’s initial public offering (IPO) in 2019.

Aramco announced on Friday that the shares were priced at 27.25 riyals ($7.27) each, within the pre-set price range of 26.70 to 29.00 riyals. The secondary offering, internally codenamed Project Bond by the involved banks, was the result of meticulous planning over several months.

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This transaction is set to introduce over 120 new international investors to Aramco, enhancing its global investor base. “The overall demand for the offering exceeded $65 billion across global blue-chip institutions and the domestic retail market,” one source reported.

Saudi Arabia’s de facto ruler, Crown Prince Mohammed bin Salman, is spearheading Vision 2030, an ambitious initiative funded primarily through the kingdom’s Public Investment Fund (PIF). This vision includes diverse projects, from electric vehicle production to the construction of futuristic cities in the desert.

The $925 billion sovereign fund, having adjusted some of its major giga-projects, aims to sharpen its focus on driving forward Vision 2030.

Proceeds from the Aramco share sale are expected to be channeled into the PIF, although some funds might also be allocated to address the kingdom’s budget deficit, which has been exacerbated by declining oil prices.

This significant share sale not only underscores Saudi Arabia’s capability to attract substantial foreign investment but also highlights the ongoing global confidence in Aramco and the broader Vision 2030 initiatives.

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