Page 127 - SALIK PR REPORT JUNE 2024

The Saudi government has achieved a significant milestone by successfully issuing
$5 billion in sovereign sukuks, which has garnered remarkable investor demand
exceeding $20 billion. This exceptional response underscores high confidence in the
Saudi economy. Notably, this issuance stands out for its innovative three-tranche
structure, with maturities set for 2027, 2030, and 2034, marking a first for the
Kingdom. By adopting this multi-tranche approach, Saudi Arabia aims to broaden its
funding base beyond conventional channels, thereby reinforcing its foothold in
global debt markets. This strategic move not only diversifies funding sources but
also bolsters the country’s financial standing on the international stage. The issuance
is part of Saudi Arabia’s ambitious goal to secure a total of $37 billion in funding this
year. “With these funds, Saudi Arabia is poised to accelerate progress on critical
projects, paving the way for sustainable growth and development in line with its
visionary economic objectives,” Valecha said.
High demand for Aramco 12 billion stock offer:
Saudi Aramco’s stock saw increased activity on Sunday as the $12 billion share sale
was rapidly fully subscribed, marking one of the largest share sales globally since the
company’s listing. The proceeds from the sale will support Saudi Arabia’s efforts to
diversify its economy, focusing on sectors such as artificial intelligence, sports,
tourism, and flagship projects like Neom.
A significant selling point of the offer is the opportunity to access one of the oil
industry’s largest dividends. Investors stand to benefit from a projected $124 billion
annual payout, translating to a dividend yield of 6.6 per cent, according to
Bloomberg Intelligence. This share sale comes at a time of robust demand for new
offerings in Saudi Arabia. In recent weeks, four companies collectively attracted
orders totaling $176 billion for their IPOs, reflecting strong investor interest in deals
offering potentially high returns, a trend observed over the past two years.
Positive effects of RTA’s commercial and transportation strategy:
Dubai RTA has unveiled the Dubai Commercial and Logistics Land Transport
Strategy 2030, which aims to double this sector’s contribution to Dh16.8 billion over
the coming years. The overall strategy especially emphasizes adopting and
integrating digital technology infrastructure with the core set-up by 75 per cent,
reducing emissions by 30 per cent and improving operation efficiency. The new
strategy has announced a list of 17 projects to make Dubai’s overall transportation
and logistics costs more competitive. This would in turn imply more new business
setups, thereby increasing the transportation sector’s contribution to the economy.
“This initiative is expected to bode well for companies like Aramex PJSC and Salik Co
PJSC, who would potentially see their revenues and profitability increase
substantially,” Valecha said.

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