PIF: Saudi Aramco may sell more shares if market conditions are right

Kingdom’s sovereign wealth fund has set out a plan to increase assets to $400 billion

The Saudi government sold over 1.7 percent of Aramco in an initial public offering (IPO) in 2019

RIYADH: Saudi Aramco may consider selling more shares in the oil giant if market conditions are right, the head of the Kingdom’s sovereign wealth fund, Yasir Al-Rumayyan, said on Tuesday in a televised news briefing.

The Saudi government sold over 1.7 percent of Aramco in an initial public offering (IPO) in 2019 that raised a record $29.4 billion.

The listing has triggered more IPOs in the Kingdom, which is also seeking to deepen its capital markets under reforms aimed at reducing its reliance on oil.

Al-Rumayyan asserted that there is no direct relationship between the balance sheet and finances of Aramco and Saudi Arabia’s Public Investment Fund (PIF) and any listing would depend “if they see the right market is in the right condition.”

The fund’s governor also told reporters the PIF plans to increase its assets from SR570 billion ($152 billion) to SR1.5 trillion ($400 billion).

The fund has become a fundamental pillar for the sustainability of the Saudi economy and is directly related to the Kingdom’s Vision 2030, he added.

Al-Rumayyan said that the PIF was currently developing the eight basic pillars of the fund’s strategy for the years 2021-2025, and would focus on local investments within the PIF’s new strategy, which was announced by Crown Prince Mohammed bin Salman last week.

He added that they would allocate four portfolios for local investment and two portfolios for foreign investments, with plans to also invest SR1 trillion ($267 billion) in new projects in the next five years

Al-Rumayyan said that financing new investments from the fund’s money and assets would be granted by the government, and it would rely on profits generated by their current companies to fund future projects, adding that the PIF has launched more than 30 new companies.

In 2017, the fund announced it would invest $45 billion in Softbank’s inaugural $100 billion technology fund. “Softbank is reaching an all-time high,” Al-Rummayan said. “The higher the risk the higher the returns. We always look to diversity in our bets and investments in different sectors and geography.”

Another high profile PIF-backed company is Lucid Motors, the Californian electric vehicle carmaker the fund backed with a $1 billion investment in 2018. Media reports have claimed the carmaker is in talks with the PIF to build an electric vehicle factory in the

Kingdom, reportedly near Jeddah.

“We are always open for any good ideas,” the governor said. “One of the things that we would like to provide for the investor, is how we can open up many opportunities for them,” he added.

Al-Rumayyan said the fund has started talks with a number of other potential companies for investment, but declined to give any specific details.

“We are at very advanced stages, but you know how complicated these contracts can be with all the terms, conditions and negotiations. But we are at very advanced stages with many companies and during this year we will see many companies coming in.”