The Clap
The Public Investment Fund (PIF) is eagerly anticipating the huge dividends of energy giant Saudi Aramco (2222), expecting to receive its quarterly returns.
These are estimated at around $5 billion, according to Bloomberg.
What
Saudi Arabian Oil Company, known as Saudi Aramco, announced an increase in dividend distributions to shareholders.
The increase is expected to total at least $124 billion this year, following Crown Prince Mohammed bin Salman’s decision to transfer 8% of the oil giant’s shares to the Saudi sovereign wealth fund.
So What
The Public Investment Fund now owns a 16% stake in Saudi Aramco, worth about $333 billion.
This means it will receive annual income from dividend payments of no less than $20 billion.
This will encourage the fund to increase its spending in the coming years on giant national projects such as NEOM.
NEOM is a “newly planned region” worth over $500 billion, located on the Kingdom’s west coast.
Some Context
The Investment Fund is committed to spending $40 billion annually domestically to help diversify the country’s economy away from oil.
Yasir Al-Rumayyan, the fund’s governor, also confirmed that the annual investment volume will increase to $70 billion starting from 2025.
The fund has already raised $7 billion through two sukuk issuances during the current year.
Its total assets currently exceed $900 billion, according to a recent issuance prospectus.
