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Saudi Aramco’s $12B Share Sale Sells Out Within Hours

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4 months ago

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Saudi Aramco’s latest $12 billion share offering sold out within hours of its launch on Sunday.

The rapid sellout marks a significant success for the Saudi government, which is leveraging the proceeds to support an ambitious economic transformation plan.

Strong Demand Drives Quick Sellout

According to terms seen by Bloomberg News, the demand for all shares on offer was met within a few hours after the books opened.

The shares were sold within a price range of 26.70 riyals to 29 riyals, reflecting robust interest from both local and foreign investors.

Three sources familiar with the matter, who requested anonymity, confirmed the participation of a diverse investor base.

The extent of foreign interest in the share sale will be closely scrutinized, as it serves as an indicator of global confidence in Saudi assets.

During Aramco’s 2019 initial public offering (IPO), foreign investors were hesitant, with only 23% of the $29.4 billion listing allocated to them. This time, the mix of investors suggests a potentially broader international appeal.

Appeal of High Dividends

One of the main attractions for investors is Aramco’s substantial dividend payout.

Bloomberg Intelligence estimates that the company’s $124 billion annual dividend translates to a yield of 6.6%, one of the highest among its peers.

This lucrative return is enticing for investors willing to overlook the company’s high valuation and the absence of stock buybacks.

Coinciding with OPEC+ Decisions

The share sale coincided with OPEC+ meetings, where the group agreed to extend oil production cuts into 2025 while gradually easing some restrictions starting later this year.

This decision is expected to allow Saudi Aramco to increase its output, potentially enhancing its future profitability.

Economic Transformation and Future Plans

Proceeds from the share sale are earmarked for Crown Prince Mohammed bin Salman’s Vision 2030, a plan aimed at diversifying the Saudi economy away from oil dependency.

The government is focusing on sectors such as artificial intelligence, sports, tourism, and the development of futuristic projects like Neom.

This latest offering, one of the largest share sales globally since Aramco’s IPO, underscores Saudi Arabia’s efforts to fill a budget deficit exacerbated by lower oil prices and the COVID-19 pandemic.

In addition to the share sale, the Saudi government has raised $17 billion through international debt sales and $25.5 billion through domestic riyal notes this year.

Banking on Success

The Saudi government engaged a consortium of global banks for the share sale, including Citigroup Inc., Goldman Sachs Group Inc., HSBC Holdings Plc, JPMorgan Chase & Co., Bank of America Corp., and Morgan Stanley. These banks also played key roles in Aramco’s 2019 IPO.

While the exact fees the banks will earn from this deal have not been disclosed, the overall compensation structure is expected to be based on the total value of the offering and related expenses.

Investor Optimism

The rapid sellout of Aramco’s $12 billion share offering highlights a period of strong demand for new share sales in Saudi Arabia.

Recently, four firms garnered a combined $176 billion in orders for their initial public offerings, attracting fund managers with the promise of near-guaranteed returns.

As Saudi Arabia continues to pursue its economic diversification goals, the successful Aramco share sale serves as a testament to the growing investor confidence in the kingdom’s financial markets and future prospects.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Dividends

Access Holdings to Pay N15.99 Billion Interim Dividend, Aig-Imoukhuede to Receive N1.151 Billion

Published

4 days ago

on

September 24, 2024

By

Aigboje Aig-Imoukhuede

Access Holdings Plc has announced an interim dividend of 45 kobo for every ordinary share of 50 kobo held in the company in the first half (H1) of 2024.

With 35.545 billion in outstanding shares, this translates to N15.99 billion in interim dividend. However, Aigboje Aig-Imoukhued, the chairman of Access Holdings, will take home N1.151 billion in dividend.

The chairman presently holds 119,231,715 direct shares and 2,438,256,720 indirect shares in the company, according to the company’s latest financial statement obtained by Investors King.

According to the lender, subject to appropriate withholding tax the dividend will be paid to shareholders whose names appear on the Register of Members at the close of business on Thursday, October 3, 2024.

The bank will pay dividends on Thursday, October 17, 2024 to all shareholders whose names appear on the Register of Members at the close of business on Thursday, October 3, 2024.

These shareholders are expected to have completed the e-dividend registration and mandated the Registrar to pay their dividends directly into their bank accounts.

However, shareholders who are yet to complete the e-dividend registration are advised to download the Registrar’s E-Dividend Mandate Activation Form, which is also available on https://theaccesscorporation.com/ and complete and submit it to either the Registrar, their respective Banks or any Access Bank Plc branch.

Shareholders with dividend warrants and share certificates that have remained unclaimed or are yet to be presented for payment or returned for validation are advised to complete the e-dividend registration or contact the Registrar.

Access Holdings grew profit after tax by 108% to N347.922 billion from N167.601 billion filed in H1 2023 while gross earnings jumped 133.5% from N940.311 billion in the first half (H1) of 2023 to N2.196 trillion in H1 2024.

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Nigerian Exchange Limited

Stock Investors Gain N131 Billion on Tuesday

Published

1 week ago

on

September 18, 2024

By

Nigerian Exchange Limited - Investors King

Nigeria’s equities market opened the holiday-shortened trading week in green as investors bought banking and consumer goods stocks despite record profit taking in insurance, industrial, oil & gas stocks.

“Looking forward, the equities market is expected to retain its buy interest as investors cherry-pick undervalued stocks. However, given the sentiment that rates might have peaked in the fixed income and money markets and investors locking in on current rates, we expect some bearish undertone to persist in the equities market,” according to United Capital research analysts.

The analysts said the bulls “will remain incentivised to persist in bargain hunting, given the tremendous mid-long-term opportunities in the equities market. Fund managers and businesses may begin to entertain mid-long-term (≥6 months) investment objectives, cherry-picking only sound equities with strong fundamentals and ongoing corporate actions. This strategy will maximise market opportunities, thereby optimising portfolio returns”.

The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and equities market capitalisation appreciated by 0.23 percent and N131billion from preceding day’s 97,456.62 points and N56.002 trillion respectively to 97,685.63 points and N56.133 trillion.

The market’s year-to-date (YtD) return rose to 30.64 percent.

According to Meristem research analysts, “While we expect subdued participation in the Nigerian equities market this week, we anticipate that buying activity will outweigh profit-taking. Our outlook is hinged on the belief that no major negative catalysts are expected to shift market direction this week. We anticipate that investors will continue selective buying, seeking opportunities across various sectors.

“Additionally, macroeconomic developments and corporate actions from companies could stimulate moderate buying interest in the market. We also do not foresee a significant shift towards the fixed-income market as yields have started to stabilize. However, we acknowledge the potential for profit-taking as short-term investors may look to capitalize on recent gains. Overall, we expect the market to close in the green zone this week,” Meristem analysts said.

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Dividends

Guaranty Trust Holding Company Declares N1 Interim Dividend, Sets October 7 for Payout

Published

2 weeks ago

on

September 13, 2024

By

GTBank -Investors King

Guaranty Trust Holding Company Plc has announced its plan to pay a sum of N1 per share of 50 kobo as interim dividends, to all registered shareholders on October 7, 2024.

According to a recent statement issued by the company on NGX , “the dividend is subject to withholding tax deduction, and will be paid to shareholders whose names appear in the register as of September 25, 2024.”

In its recently released audited consolidated and separate financial statements for the period ended June 30, the Group reported profit before tax (PBT) of N1.004 trillion, becoming the first Nigerian financial institution to cross the N1 trillion mark in profit.

This represented a 206.6 percent increase over N327.4 billion recorded in the corresponding period that ended June 2023.

The group’s profit for the period was slated at N905.67 billion, a 222 percent increase from 280.52 recorded in the corresponding period that ended June 2023.

“On October 7, 2024, the dividend will be paid electronically to ordinary shareholders whose names appear on the Register of Members as at September 25, 2024, and who have completed the e-dividend registration and mandated the Registrar to pay their dividends directly to their bank accounts,” the statement said.

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