JEDDAH, 11 September — Finance and National Economy Minister Dr. Ibrahim Al-Assaf expects to generate SR15 billion by selling 30 percent of Saudi Telecom Company shares by year-end.

“This is a big amount by all standards,” the minister told Arab News. The move would “definitely boost the Saudi economy.”

The Council of Ministers decided on Monday to sell 30 percent of STC shares in the largest state selloff in the Kingdom for 20 years.

Al-Assaf said the Cabinet decision reaffirmed the government’s commitment to privatization.

“The share floatation will allow Saudi citizens to enjoy the benefits of privatization and share STC profits,” the minister said.

STC’s entry to the stock market would strengthen the market, Al-Assaf said, adding that it would open a new channel for Saudi investors.

He said the Cabinet fixed the STC share price at SR170 on the basis of certain criteria such as profitability and its comparative weight in the market.

“I don’t think the market would have any negative effect as a result of the sale of STC shares,” Al-Assaf said, saying the company had announced the plan well in advance.

However, he pointed out that the market situation would depend on the decision of investors and how they compare the positions of various companies.

“The plan to sell the shares is not a new thing. It was announced long before. I think the investors had made advance preparations for it,” he added.

The minister said there is adequate liquidity in the Kingdom to invest in STC and other companies. He disclosed that the government would use the money obtained from privatization to pay its debts.

Economists say the plan to sell STC shares would help absorb Saudi funds repatriated from the United States. “It offers a good choice for Saudi investors,” Talaat Zaki Hafiz, a Saudi economic analyst, told Arab News.

Referring to the upcoming budget, the finance minister said: “The budget will depend mainly on oil revenues. It will be difficult to talk about the situation of oil prices in the coming months. What I can say now is that the situation is much better than what it was in the beginning of the year and hopefully it would improve further.”

Preliminary indicators show about four percent growth in the private sector. “This is significant in the backdrop of international economic situation,” Al-Assaf said.