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Saudi PIF Raises $3.2 Billion In Saudi Telecom Secondary Share Offering

The PIF raised $3.2 billion from the sale of the six percent stake in Saudi Telecom. (Asharq Al-Awsat)
The PIF raised $3.2 billion from the sale of the six percent stake in Saudi Telecom. (Asharq Al-Awsat)
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Saudi PIF Raises $3.2 Billion In Saudi Telecom Secondary Share Offering

The PIF raised $3.2 billion from the sale of the six percent stake in Saudi Telecom. (Asharq Al-Awsat)
The PIF raised $3.2 billion from the sale of the six percent stake in Saudi Telecom. (Asharq Al-Awsat)

The Saudi Public Investment Fund (PIF) and the Saudi Telecom Company (STC) - the largest telecommunications company in the Middle East - announced the successful completion of the secondary public offering of 120 million shares, representing 6 percent of the company’s capital.

A joint statement said that the Kingdom’s sovereign wealth fund sold 120 million shares to local, international institutional and retail investors at 100 riyals per share.

The PIF raised $3.2 billion from the sale of the 6 percent stake in Saudi Telecom.

The $430 billion sovereign wealth fund retains a 64 percent stake in STC’s issued shares after the offering.

“The strong interest that this offering has generated from domestic and international investors is testament to STC’s enduring strengths and exciting prospects for the future,” said Yazeed Al-Humied, PIF deputy governor and head of Mena investments.

“This transaction is in line with PIF’s strategy 2021-2025... to recycle capital by selling stakes in the companies owned by PIF, as with the secondary public offering of PIF’s shares in STC and the [initial public offerings] of Acwa Power and Saudi Tadawul Group, to reinvest the proceeds in emerging and promising sectors in the local economy.”

For his part, STC group chief executive Olayan Alwetaid said: “We are extremely pleased to see the strong interest in the offering from domestic and international investors."

"The increase in the company’s free float percentage will further enhance the company’s international investment case, help make its shares accessible to a wider range of investors and improve trading liquidity,” he added.

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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)

Business activity in Saudi Arabia's non-oil sector accelerated to a four-month high in September, driven by strong demand, which led to faster growth in new orders. The Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI), adjusted for seasonal factors, rose to 56.3 points from 54.8 in August, marking the highest reading since May and further distancing itself from the 50.0 level that indicates growth.

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders, alongside challenges in supply. The improvement in business conditions contributed to a significant rise in employment opportunities, although difficulties in finding skilled workers led to a shortage in production capacity.

At the same time, concerns over increasing competition caused a decline in future output expectations. According to the PMI statement, inventories of production inputs remained in good condition, which encouraged some companies to reduce their purchasing efforts.

Growth was strong overall and widespread across all non-oil sectors under study. Dr. Naif Al-Ghaith, Senior Economist at Riyad Bank, said that the rise in Saudi Arabia's PMI points to a notable acceleration in the growth of the non-oil private sector, primarily driven by increased production and new orders, reflecting the sector’s expansionary activity.

Al-Ghaith added that companies responded to the rise in domestic demand, which plays a crucial role in reducing the Kingdom's reliance on oil revenues. The upward trend also indicates improved business confidence, pointing to a healthy environment for increased investment, job creation, and overall economic stability.

He emphasized that this growth in the non-oil sector is particularly important given the current context of reduced oil production and falling global oil prices. With oil revenues under pressure, the strong performance of the non-oil private sector acts as a buffer, helping mitigate the potential impact on the country's economic conditions.

Al-Ghaith continued, noting that diversifying income sources is essential to maintaining growth amid the volatility of oil markets. He explained that increased production levels not only enhance the competitiveness of Saudi companies but also encourage developments aimed at expanding the private sector's participation in the economy.

This shift, he said, provides a more stable foundation for long-term growth, making the economy less susceptible to oil price fluctuations.