#Saudi Aramco IPO unlikely to have 'direct fiscal effect' - Fitch - Arabianbusiness

Saudi Aramco IPO unlikely to have 'direct fiscal effect' - Fitch - Arabianbusiness:

Saudi Aramco's IPO will have little direct fiscal effect, but could help offset the economic impact of renewed government austerity measures by allowing the Public Investment Fund (PIF) to boost domestic investments, according to Fitch Ratings. 


The ratings agency said in a new research note that the IPO's effect on Saudi Arabia's external balance sheet will depend on the nature of PIF investments and the sources of financing for the IPO.

Fitch said the IPO could generate proceeds of around SR90-96 billion ($24-26 billion or 3 percent of GDP) at the indicative valuation range of $1.6-1.7 trillion. 


These proceeds will flow to the PIF, which will use them for domestic and foreign investments. The funds will be small relative to medium-term financing needs, the agency noted.