Aramco Share Sale Ranks Among World’s Largest Since Its Own IPO - Bloomberg

Aramco Share Sale Ranks Among World’s Largest Since Its Own IPO - Bloomberg

Saudi Arabia’s offer of a sliver of Aramco that will raise as much as $12 billion ranks among the largest share sales globally since the kingdom listed the oil giant five years ago.

At the top end of the indicated price range, the deal would be the sixth-largest share sale since the firm raised $30 billion in its 2019 initial public offering. It’s also set to be the fourth biggest follow-on offering in that period.

The kingdom could raise an additional $1.2 billion if it exercises an option to sell more shares as part of the offering.

Proceeds will help fund initiatives to diversify the economy away from oil as Crown Prince Mohammed bin Salman pushes into artificial intelligence, sports, tourism and projects such as Neom.

That’s crucial at a time when crude oil prices are below levels the government needs to balance its budget. The kingdom’s also lagged behind a target of attracting more than $100 billion a year in foreign direct investment.

The latest deal has been in the works for year. MBS, as the crown prince is known, said in 2021 that the government would look to sell more Aramco shares in the future. Those plans gained momentum a year ago, when the kingdom began working with advisers to study the feasibility of a follow-on offering in Riyadh.

Mideast Stocks: #AbuDhabi index jumps ahead of OPEC+ meeting

Mideast Stocks: Abu Dhabi index jumps ahead of OPEC+ meeting

Stock markets in the United Arab Emirates closed higher on Friday, with the Abu Dhabi index leading gains ahead of an OPEC+ meeting two days later.

OPEC+ is working on a complex deal to be agreed at its meeting on Sunday that will allow the group to extend some of its deep oil production cuts into 2025, three sources familiar with OPEC+ discussions said on Thursday.

Abu Dhabi's benchmark index advanced 1.3%, rebounding to a second session after hitting a 28-month low on May 29, boosted by a 1.9% surge in UAE's largest listed firm International Holding Company, and a 3.9% jump in Emirates Telecommunication Group. Abu Dhabi index notched up 0.3% after two weeks of losses, and logged 2.3% of monthly decline, according to LSEG data. However, Brent crude - the key contributor to the Gulf's economy - was trading 0.04% lower at $81.83 a barrel by 1156 GMT.

Among the gainers, Abu Dhabi's flagship shipping firm Abu Dhabi Ports Company gained 1.8% after the firm signed an MoU with Madagascar's Economic Development Board to explore the development of economic cities & free zones, ports, marina and cruise port facilities.

Dubai's main index settled 0.2% higher, lifted by industrial and real estate gains, rebounding for the second session after touching a nearly 6-month low. Among the winners, toll gate operator Salik Company increased 3.1% and business park operator Tecom Group rose 1.5%.

Dubai index recorded 4.3% losses, its highest monthly decline since Oct. last year, while it fell 0.9% on a weekly basis, according to LSEG data. Stock markets in the UAE rebounded to a certain extent after a long period of price corrections, said Joseph Dahrieh, Managing Principal at Tickmill.

According to Joseph, "Both markets could remain exposed to downside risks while investors continue to monitor geopolitical risks, oil markets, and changing expectations regarding monetary policy in the US".

Ex-Banker Leading Adnoc’s M&A Push Says Deal Spree Will Continue - Bloomberg

Ex-Banker Leading Adnoc’s M&A Push Says Deal Spree Will Continue - Bloomberg

Abu Dhabi National Oil Co., the state oil giant that underpins the United Arab Emirates’s booming economy, has become one of the energy industry’s busiest dealmakers as it looks to go global.

But in recent months stalled deals prompted speculation that Adnoc had lost momentum. Not so, says Klaus Froehlich, the former Morgan Stanley banker spearheading most of Adnoc’s international expansion plans.

While the company will always be disciplined, it’s “full throttle ahead” with its expansion and is pursuing a “healthy deal pipeline,” Froehlich, Adnoc’s chief investment officer, said in a rare interview earlier this month.

“Adnoc is executing on its plan and creating a portfolio of businesses across key verticals in gas, LNG, chemicals as well as renewables and little by little, the puzzle is now coming together,” he said.

Adnoc Chief Executive Officer Sultan Al Jaber has transformed the country’s top oil producer in the last few years. He has brought billions of dollars into the firm by selling shares in some of its key units and got international investors such as Brookfield Asset Management and KKR & Co to put money in the company’s infrastructure. Al Jaber is also the main architect behind Adnoc’s international expansion plan.

The energy giant has announced a series of acquisitions as part of a plan to invest $150 billion by 2027 to expand its footprint at home and spread its international reach.

#UAE's non-oil output will remain robust, continue to support economic growth in 2024: World Bank

UAE's non-oil output will remain robust, continue to support economic growth in 2024: World Bank

The real gross domestic product (GDP) growth of the UAE is projected to accelerate to 3.9 percent in 2024, fuelled by OPEC+'s announced significant oil production hike in the second half of 2024 and a recovery in global economic activity, according to the Spring 2024 Gulf Economic Update (GEU) issued by the World Bank.

The oil output growth is projected to reach 5.8 percent in 2024. Non-oil output will remain robust and continue to support economic growth in 2024, expanding at 3.2 percent, driven by strong performance in the tourism, real estate, construction, transportation, and manufacturing sectors.

The report stated that the UAE continued its strategic spending growth, supported development initiatives, and highlighted its commitment to sustainable, green, and digital growth.

It explained that the UAE maintained a strong current account surplus of 9.1 percent of GDP, supported by rising non-oil exports in tourism and commercial services, enhanced new investments, and trade agreements with key Asian and African markets.

#SaudiArabia sets new test for international interest with $13.1 bln Aramco sale | Reuters

Saudi Arabia sets new test for international interest with $13.1 bln Aramco sale | Reuters

Saudi Arabia and its bankers will on Sunday morning start taking orders for as much as $13.1 billion worth of shares in its energy giant Aramco (2222.SE), opens new tab, in a major test of international investor interest in its market.

In a long-anticipated announcement on Thursday, the kingdom and Aramco detailed plans to sell up to a 0.7% in the state-controlled oil company, with 10% of the offering reserved for retail investors, based on demand. Order-taking will run through June 6 and the deal will price on June 7.

The offering - codenamed Project Bond according to sources - has been trailed for months as a key step in diversifying the company's investor base since its record-breaking initial public offering (IPO) in 2019, as well as for its potential to further fuel the kingdom's massive economic diversification programme.

It also marks a test of interest in Saudi markets after lukewarm interest from international investors in the 2019 flotation amid concerns about a high valuation, Saudi government control and the energy transition away from hydrocarbons.

International investors have been similarly reticent about the kingdom's mega-projects, from beach resorts to new cities.

Investors buying into Aramco will need to weigh environmental concerns against its rich payouts.

"Since the IPO, higher expectations on dividend payout and oil price have outweighed lower expectations on output," said Hasnain Malik, head of equity research, at Dubai-based Tellimer.

#Saudi fund invests in China effort to create rival to OpenAI

Saudi fund invests in China effort to create rival to OpenAI

A Saudi Arabian fund has backed China’s most prominent generative artificial intelligence start-up, becoming the only foreign investor in the country’s efforts to create a homegrown rival to OpenAI. 

Prosperity7, part of the state-owned oil group Aramco’s venture capital arm, has participated in a roughly $400mn investment round in AI start-up Zhipu AI, said two people familiar with the matter. The deal values the Chinese group at about $3bn. 

Previously, China’s fledgling generative AI sector has been forced by US restrictions to rely on domestic funding, making Prosperity7’s investment the first high-profile example of a foreign backer throwing its weight behind one of the leading four generative AI start-ups. 

Zhipu and its closest rivals — Moonshot AI, MiniMax and 01.ai — have been dependent on support from government funds and large, local cloud providers. 

Prosperity7, which manages a $3bn fund, was a minority investor in Zhipu’s round, according to two people. Prosperity7 and Zhipu did not respond to a request for comment. 

The investment demonstrates Saudi willingness to support an ecosystem that could guard against US dominance in AI. “The Saudis don’t want Silicon Valley dominating this industry,” said one person close to the fund.