#UAE markets gain on firm oil prices | Reuters

UAE markets gain on firm oil prices | Reuters

Stock markets in the United Arab Emirates closed higher on Friday, as oil prices firmed after OPEC+ members Saudi Arabia and Russia indicated readiness to pause or reverse oil output increases.

Oil prices - a key catalyst for Gulf's financial market - were up 0.39% to $79.89 a barrel by 1057 GMT.

Abu Dhabi's benchmark index (.FTFADGI), opens new tab gained 0.2%, lifted by a 0.3% increase in UAE's largest listed firm, International Holding Company (IHC.AD), opens new tab and a 0.9% hike in IHC-owned conglomerate Alpha Dhabi Holding (ALPHADHABI.AD), opens new tab.

Among the gainers, sports management firm Palms Sports (PALMS.AD), opens new tab surged 4.8% after being selected as the El Qalaa El Hamraa Mega Sports Complex operator in Egypt.

Dubai's main index (.DFMGI), opens new tab settled 0.1% higher, breaking three sessions' losing streak as supported by a 1.3% rise in top lender Emirates NBD Bank (ENBD.DU), opens new tab and a 0.5% gain in Dubai Islamic Bank (DISB.DU), opens new tab.

However, the Dubai index witnessed some price fluctuation due to investors' cautious behaviour ahead of crucial U.S. non-farm payroll data, which will provide clues on the timing of the Federal Reserve's rate cuts.

The U.S. non-farm payroll report for May due later in the day.

#Saudi Aramco prices stock offer at low end of range in $11.2bn sale

Saudi Aramco prices stock offer at low end of range in $11.2bn sale

Saudi Arabia has sold $11.2bn of shares in Saudi Aramco at a price towards the low end of its expectations, suggesting investors remain cautious about the future prospects of the world’s largest oil company. 

The sale raises new funds for the government, which ran a budget deficit of $3.3bn in the first quarter of the year as it struggled to meet the spending demands of Vision 2030, Crown Prince Mohammed bin Salman’s plan to transform the economy. 

The government placed nearly 1.55bn shares, or 0.64 per cent of the company, at SR27.25 ($7.27) apiece, a 6 per cent discount to the closing price of SR29 on the day before the deal was announced. 

It had initially set a range of SR26.7 to SR29 for the sale. 

The offering was the first big attempt by Aramco to woo foreign investors, with its senior executives, including chief executive Amin Nasser, flying to London and New York for roadshows. 

Attracting international demand was “the big objective this time”, said one person familiar with the process, though they noted that some institutions were not set up to trade shares listed on Saudi Arabia’s Tadawul index. “Even for global investors it’s still a bit off the beaten track,” they added. 

Nevertheless. the company said the offering was fully subscribed, with institutions receiving 90 per cent of the shares, and retail investors taking the rest.   

Ahead of its blockbuster 2019 initial public offering, which raised $25.6bn, Aramco was forced to scale back its ambitions and focus on local investors and state funds in the Gulf as foreign institutions balked at the lofty valuation sought by Saudi officials and fretted over the company’s corporate governance and the future demand for oil.  

This time around, the company pointed to its improved dividend yield as it made a play to broaden its shareholder base. Aramco has promised to pay out $124bn this year as its main shareholder, the Saudi government, leans on the oil group to fund its ambitious plans.  

“You are looking at a 6.5 per cent or 7 per cent yielding stock, and that compares with around 4 per cent during the original 2019 listing,” said Neil Beveridge, head of equity research for Bernstein in Hong Kong.   

#SaudiArabia set to raise $11.2 bln selling Aramco shares at lower end of expectations | Reuters

Saudi Arabia set to raise $11.2 bln selling Aramco shares at lower end of expectations | Reuters

Saudi Arabia is poised to raise more than $11.2 billion selling shares in oil giant Aramco (2222.SE), opens new tab to help fund its spending plans, after pricing the stock at the lower end of expectations, the company said on Friday.

Aramco shares were priced at 27.25 riyals ($7.27), near the bottom of a 26.7-to-29 riyals range used in marketing the sale.

The offering was covered four to five times, a person familiar with the matter said.

Foreign demand was stronger than expected, the person and two others familiar with the matter said, and was greater than international demand for Aramco's 2019 record-breaking IPO, two of the people said. One of them said demand included interest from China and elsewhere in Asia and another said the offering drew from Europe and London.

The Saudi government and Aramco did not immediately respond to a request for comment on the demand.