Saudi Arabia seeks to attract $427bn with industrial program

(Khalid Al-Falih, pictured earlier this month, said the Kingdom would announce projects worth SR70 billion. (File photo/Reuters)
Updated 28 January 2019

Saudi Arabia seeks to attract $427bn with industrial program

  • The move is aimed at diversifying the economy away from oil and creating jobs
  • There are plans to announce projects in the military, chemicals and small businesses industries worth $50 billion

RIYADH: Saudi Arabia aims to attract private sector investments worth SR1.6 trillion ($427 billion) over the next decade through an industrial development program aimed at diversifying the economy, Energy Minister Khalid Al-Falih said on Saturday.
Investments will be made through the National Industrial Development and Logistics Program (NIDLP), one of the programs set out under Vision 2030, a wider reform strategy led by Crown Prince Mohammed bin Salman and intended to wean the economy off hydrocarbons and create jobs for Saudis.
Falih said the kingdom would on Monday announce projects worth 70 billion riyals that are “ready for negotiations” under the NIDLP to boost industry, mining, energy and logistics.
At a later stage, it plans to announce projects in the military, chemicals and small businesses industries worth $50 billion, he added without giving a timeframe.
“The (NIDLP) program targets 1.6 trillion Saudi riyals ... it is quite ambitious but it is over a 10-year period so we have got the time to do it,” Falih told a press conference.
The program will seek to raise money from both domestic and foreign investors.
“We will have a huge contribution from the private sector outside the kingdom, but we will leave the bigger share for the Saudi private sector,” Falih said.
The program will integrate the mining, industry and energy sectors, which Falih said were each vital to the kingdom’s plan to empower the private sector and make it the main driver for economic growth.
After decades of spending on development projects, the government has made attracting greater foreign investment a cornerstone of its Vision 2030 plan.
But foreign investors have been rattled in recent months by Saudi Arabia’s deteriorating relations with Western governments after the murder of journalist Jamal Khashoggi at the Saudi consulate in Istanbul in October.
Transport Minister Nabeel Al-Amudi told the press conference that NIDLP would launch 60 initiatives in the logistics sector, including five new airports and 2,000 km of railways, and aims to attract more than 135 billion riyals of investments.
“We aim by 2020 that the logistics sector contributes 221 billion riyals to GDP,” he said.
Under Vision 2030 the kingdom aims to have the private sector operate much of its transport infrastructure, including airports and sea ports, with the government keeping a role as regulator. ($1 = 3.7503 riyals) (Writing by Hesham Hajjali, Ghaida Ghantous and Marwa Rashad; Editing by Edmund Blair and Clelia Oziel)


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: