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

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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/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Nigerian Exchange Limited

NGX Rebounds with N263bn Gain as Small and Mid-Cap Stocks Surge

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The Nigerian Exchange Limited (NGX) recovered on Thursday amid the surge in strong investor demand for small and mid-cap stocks.

The market capitalisation rose by N263 billion to N56.91 trillion.

The All-Share Index climbed by 0.47%, closing at 100,503.21 points, reflecting a solid buying interest across various sectors.

Despite the market’s overall positive performance, trading activity was subdued with a 64.3% decrease in average daily volume to 392.8 million units.

However, the number of deals increased by 3.4% to 9,013, while the traded value declined by 17.3% to N8.33 billion.

Guaranty Trust Holding Company led the volume trades, with 39.75 million shares worth N1.80 billion across 663 deals.

Meanwhile, Airtel Africa dominated in value, with trades worth N2.25 billion in just 34 transactions.

Sector performance was mixed. Gains were recorded in the oil and gas, consumer goods, and industrial goods sectors, rising by 0.19%, 0.07%, and 0.01%, respectively.

Notable stocks included Airtel Africa, Eterna Plc, Oando, and NASCON Allied Industries.

Conversely, the insurance and banking sectors faced losses, declining by 2.35% and 2.28%.

Top gainers of the day were United Capital, Oando, and Africa Prudential, while Linkage Assurance and Veritas Kapital led the decliners.

This rebound highlights investor confidence in Nigeria’s equities market, with opportunities emerging in small and mid-cap stocks.

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Nigerian Exchange Limited

Equities Market Dips 0.04% as Q2 Earnings Hit NGX

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Nigeria’s equities market experienced a slight decline of 0.04% on Wednesday ahead of the second quarter (Q2) financial results.

At the close of trading on the Nigerian Exchange Limited (NGX), the All Share Index (ASI) fell from the previous day’s high of 100,075.59 points to 100,032.32 points.

Similarly, the equities market capitalization decreased from N56.670 trillion to N56.645 trillion.

Jaiz Bank, Cutix, Zenith Bank, Universal Insurance, and FCMB Group were among the most actively traded stocks.

Investors exchanged 1,099,300,929 shares worth N10.076 billion across 8,720 deals.

Several stocks dominated the sell-side, including RT Briscoe, which fell from 70 kobo to 66 kobo, a 5.71% decrease.

FTN Cocoa dropped by 4.44%, while Tantalizer, Neimeth, and Consolidated Hallmark Holdings also saw declines.

The market’s year-to-date (YtD) positive return decreased to 33.78%. While this month has seen a marginal drop of 0.03%, the week still shows an increase of 0.36%.

The dip reflects investor reactions to the ongoing release of corporate earnings for Q2. As companies disclose their financial results, market participants are adjusting their positions accordingly.

As more Q2 financials are released, market volatility is expected. Investors are closely monitoring earnings reports to guide their investment strategies.

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Nigerian Exchange Limited

Nigeria’s Equities Market Gains 0.11%, Adds N62 Billion in Value

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The Nigerian equities market posted a 0.11 percent gain on Tuesday as increased buy-side actions boosted the market’s value by N62 billion.

This positive movement reflects renewed investor confidence and activity in the market.

Leading the charge were stocks like United Capital, UACN, and Cutix. Investors engaged in 8,151 deals, exchanging 368,392,413 shares worth N7.424 billion.

Among the top advancers, United Capital saw a significant rise from N30 to N33, adding N3 or 10 percent.

Cutix also performed well, climbing from N5.08 to N5.58, an increase of 50 kobo or 9.84 percent.

Sunu Assurances and Cornerstone Insurance were other notable gainers, with Sunu Assurances increasing from N1.29 to N1.39, adding 10 kobo or 7.75 percent, and Cornerstone moving from N1.95 to N2.10, up 15 kobo or 7.69 percent.

UACN also saw a substantial gain, rising from N14.15 to N15.20, an addition of N1.05 or 7.42 percent.

The market’s positive return year-to-date (YtD) now stands at 33.84 percent, with a marginal increase of 0.02 percent for the month. So far this week, the market has grown by 0.41 percent.

Key stocks such as Zenith Bank, Access Holdings, GTCO, Jaiz Bank, and UBA were actively traded, indicating strong investor interest.

At the close of trading on the Nigerian Exchange Limited (NGX), the All Share Index (ASI) and equities Market Capitalisation rose from the previous day’s low of 99,966.28 points and N56.608 trillion to 100,075.59 points and N56.670 trillion, respectively.

This uptick in market activity and value reflects growing optimism among investors, buoyed by positive corporate earnings and macroeconomic indicators.

As Nigeria’s market continues to evolve, stakeholders are hopeful for sustained growth and stability in the coming months.

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