Shares of Saudi Arabia's state oil company Aramco rose on Sunday following a stock sale that raised around $11.2 billion. The shares were trading at 28.25 Saudi riyals ($7.53) on the Tadāwul Saudi stock exchange, above the stock sale offer price of 27.25 Saudi riyals. The secondary offering had demand topping $65 billion, with over half of the sale placed with foreign investors. Saudi Arabia is pushing ahead with plans to diversify its economy away from oil under Crown Prince Mohammed bin Salman's Vision 2030 program. However, the plan has a hefty price tag, with the futuristic city of Neom alone expected to cost around $500 billion. Oil prices remain volatile, with falling prices due to uncertain demand outlook and anticipation of an interest rate cut by the U.S. Federal Reserve [b92bae42] [9d943f4f].
Saudi Arabia's highly anticipated sale of shares in oil giant Aramco drew significant demand within hours of opening on Sunday. The offering, which could raise up to $13 billion, will be a gauge of Riyadh's appeal to foreign investors and a test of international appetite for the kingdom's assets. Aramco's shares were down 2.6% on Sunday, valuing the company at about $1.8 trillion. The banks involved in the deal will take institutional orders through Thursday and will price the shares the following day, with trading expected to start the following Sunday on Riyadh's Saudi Exchange. The Saudi government is offering about 1.545 billion Aramco shares, or 0.64% of the company, at a price range of 26.7 to 29 riyals per share. The banks can increase the offering by an additional $1 billion. The sovereign wealth fund, the Public Investment Fund (PIF), is expected to benefit from the funds raised. Approximately 10% of the new offering will be reserved for retail investors, depending on demand [2fa004a0] [7e46e862].
Saudi Arabia is planning a multi-billion-dollar share sale in energy giant Aramco as soon as June. The offering could raise around $10 billion and the shares would be listed in Riyadh. Aramco has become a key source of cash payouts for the Saudi government, which controls a 90% stake in the group [21032dc2].
Saudi Arabia's budget deficit in the third quarter of 2023 reached 35.8 billion riyals ($9.5 billion), nearly seven times larger than the previous quarter. The deficit was primarily attributed to a decline in both energy and non-oil income. Expenditure decreased by 8% to $78 billion, while revenues decreased by almost 18% to $69 billion. This decline in revenues was mainly due to lower oil and tax receipts. The country's economy contracted in the third quarter after cutting oil production in July to boost prices. Oil revenues declined by 18% to 147 billion riyals, while non-oil income decreased by 17% to 112 billion riyals. Saudi Arabia relies on oil prices above $86 per barrel to balance its budget, and even higher when accounting for spending by the sovereign wealth fund.
Meanwhile, Russia's budget deficit for the year is projected to be around 1% of its gross domestic product (GDP), according to Finance Minister Anton Siluanov. The deficit for January-October stood at 1.24 trillion roubles ($13.82 billion), or 0.7% of GDP. Higher oil prices and increased tax payments have helped the Russian government narrow its budget shortfall. Russia's 2023 budget plan envisions a deficit of 2.93 trillion roubles, or 2% of GDP.
In Jordan, the state spending is forecast at 12.4 billion dinars ($17.5 billion) in its draft 2024 budget, with growth expected to be around 2.6 percent. The budget deficit is expected to fall to 2.1 percent of GDP next year, and the government will not impose new taxes for a fourth year in a row. Public debt is expected to drop to 88.3 percent of GDP. The budget raises allocations for capital investments by 11.8 percent to a record 1.7 billion dinars, with most of the funds channeled into an economic modernization program. Jordan's commitment to IMF reforms and investor confidence in the outlook have helped maintain stable sovereign ratings.
Saudi Aramco, the state-owned oil company of Saudi Arabia, has started issuing U.S. dollar-denominated international bonds under its Global Medium Term Note Programme. This move is part of their strategy to bolster financial operations and expand their global reach. The bond issuance aligns with Saudi Aramco's broader strategy to enhance liquidity and secure financial stability amid fluctuating oil markets. This move echoes the company's commitment to expanding its global financial footprint and strengthening its economic resilience [79f8d7fe] [9d943f4f].
Saudi Aramco has begun issuing US dollar-denominated international bonds under its Global Medium Term Note Program. The issuance is part of the company's strategy to enhance liquidity and financial stability amidst fluctuating oil markets. The move also aligns with Saudi Aramco's goal of expanding its global reach and strengthening its economic resilience. By issuing U.S. dollar-denominated bonds, Saudi Aramco aims to diversify its funding sources and tap into international capital markets. This will allow the company to raise funds at competitive rates and attract a broader investor base. The bond issuance comes at a time when Saudi Arabia is pushing ahead with its economic diversification plans under the Vision 2030 program. The country aims to reduce its dependence on oil and develop other sectors of the economy. The funds raised through the bond issuance will support Saudi Aramco's investment projects and contribute to the country's economic growth. Overall, the issuance of U.S. dollar-denominated bonds demonstrates Saudi Aramco's commitment to financial resilience and global expansion [6fb35810].