Saudi non-oil economy grows at fastest rate for 17 months: Survey

The infusion of government money triggered a stock market rebound and helped to bring down money market rates. (Reuters)
Updated 05 February 2017

Saudi non-oil economy grows at fastest rate for 17 months: Survey

DUBAI: Growth in Saudi Arabia’s non-oil private sector accelerated to its fastest rate for 17 months in January as the government injected cash into the economy after a long period of austerity, a survey of companies showed on Sunday.
The seasonally adjusted Purchasing Managers’ Index (PMI) rose to 56.7 last month from 55.5 in December. A level above 50 means business is expanding.
With its finances strained by low oil prices, the government delayed paying huge debts to the construction industry and other private sector companies, in some cases for more than a year.
But after a $17.5 billion foreign bond issue last October helped replenish its coffers, it began repaying debts and disbursed about SR100 billion ($27 billion) in November and December, according to statements by officials and central bank data. Finance minister Mohammed Al-Jadaan told Reuters in
December a further SR30 billion would be paid soon.
The infusion of government money triggered a stock market rebound and helped to bring down money market rates, cheering companies, although business conditions are expected to remain tough for at least a couple of years as Riyadh’s austerity measures continue to take effect.
“The rise in Saudi Arabia’s PMI to the highest level in 17 months is an encouraging start to the year, particularly as it reflects faster output and new order growth in January,” said Khatija Haque, head of regional research at Emirates NBD.
“Firms also appear to be more optimistic about the coming 12 months.”
Growth in output rose to 64.3 in January from 63.3, while growth in new orders accelerated to 60.7 from 58.9 and employment growth also increased.
Both output price inflation and input price inflation edged up last month.


Saudi Aramco shares soar at maximum 10% on market debut

Updated 11 December 2019

Saudi Aramco shares soar at maximum 10% on market debut

  • Company is now world’s largest publicly traded company, bigger than Apple

RIYADH: Saudi Aramco shares opened at 35.2 riyals ($9.39) on Wednesday at the Kingdom’s stock exchange, 10 percent above their IPO price of 32 riyals, in their first day of trading following a record $26.5 billion initial public offering.
Aramco has earlier priced its IPO at 32 riyals ($8.53) per share, the high end of the target range, surpassing the $25 billion raised by Chinese retail giant Alibaba in its 2014 Wall Street debut.
Aramco’s earlier indicative debut price was seen at 35.2 riyals, 10 per cent above IPO price, raising the company’s valuation to $1.88 trillion, Refintiv data showed.
At that price, Aramco is world’s most valuable listed company. That’s more than the top five oil companies – Exxon Mobil, Total, Royal Dutch Shell, Chevron and BP – combined.
“Today Aramco will become the largest listed company in the world and (Tadawul) among the top ten global financial markets,” Sarah Al-Suhaimi, chairwoman of the Saudi Arabian stock exchange, said during a ceremony marking the oil giant’s first day of trading.
“Aramco today is the largest integrated oil and gas company in the world. Before Saudi Arabia was the only shareholder of the company, now there are 5 million shareholders including citizens, residents and investors,” said Yasir Al-Rumayyan, the managing director and chief executive of the Saudi Public Investment Fund.
“Aramco’s IPO will enhance the company’s governance and strengthen its standards.”
Amin Nasser, the president and CEO of Saudi Aramco, meanwhile thanked the new shareholders for their confidence and trust of the oil company.
The sale of 1.5 percent of the firm, or three billion shares, is the bedrock of Crown Prince Mohammed bin Salman’s ambitious strategy to overhaul the oil-reliant economy.
Riyadh’s Tadawul stock exchange earlier said it will hold an opening auction for Aramco shares for an hour from 9:30 a.m. followed by continuous trading, with price changes limited to plus or minus 10 percent.

The company said Friday it could exercise a “greenshoe” option, selling additional shares to bring the total raised up to $29.4 billion.
The market launch puts the oil behemoth’s value at $1.7 trillion, far ahead of other firms in the trillion-dollar club, including Apple and Microsoft.
Two-thirds of the shares were offered to institutional investors. Saudi government bodies accounted for 13.2 percent of the institutional tranche, investing around $2.3 billion, according to lead IPO manager Samba Capital.
The IPO is a crucial part of Prince Mohammed’s plan to wean the economy away from oil by pumping funds into megaprojects and non-energy industries such as tourism and entertainment.
Watch the video marking Aramco’s opening trading: