VISION 2030 REACHES MILESTONE WITH ARAMCO IPO

A big goal of the Saudi Vision 2030 programme has been to publicly list a portion of Saudi Aramco on the stock exchange. For Saudi, 11 December proved to be a landmark day as Aramco began trading on the Tadawul at a share price of SAR 32 per share.

The offering process generated subscriptions by institutional and individual subscribers of SAR 446 billion (USD 119 billion), or 4.65 times the total offer and attracted more than 5 million subscribers, the company said.

The government sold 3 billion shares in the exchange, equivalent to 1.5% of the share capital, generating proceeds of SAR 96 billion or USD 25.6 billion, making it the world’s largest initial public offering.

His Royal Highness Prince Mohammad bin Salman bin Abdulaziz Al Saud, crown prince, deputy prime minister and minister of defence who is also chairman of the Economic and Development Affairs Council, “pointed to Aramco's IPO as a major step and supporter in enhancing the role and participation of the private sector in the economy, and that the prospects for opportunities for the private sector will increase during the coming period, enhancing its role in the growth and diversification of the economy and increasing employment rates in the medium and long term.”

Indeed, the IPO allows the government to focus on a number of its goals focused on diversifying the economy.

“Today’s milestone underlines the kingdom’s commitment to nurturing a strong capital market and demonstrates further significant progress in delivering Vision 2030 – the kingdom’s transformation, economic growth and diversification programme that continues with pace and determination,” according to Yasir Othman Al-Rumayyan, chairman of the board of directors at Saudi Aramco.

Saudi government entities, ministries and the private sector also continue to work on projects aligned with the Saudi Vision 2030.

These include mega projects, along with Vision Realisation Programmes that promote private sector investment in promising sectors such as manufacturing and mining, financial services, IT, tourism, entertainment and sports.

"We aim to create an attractive investment environment that contributes in directing the national economy towards wider prospects of diversification, growth and prosperity,” according to His Royal Highness Prince Mohammad bin Salman bin Abdulaziz Al Saud.

“The government will continue to move forward in implementing the stages of economic transformation and progress in diversifying the productive base in the economy while maintaining financial sustainability and providing wider opportunities for a better future for the current and upcoming generations,” he said.

The 2020 budget is part of the bigger 2030 targets, and aims to reinforce the commitment to implement reforms, plans and programmes aimed at achieving what was included in the strategy, as it sets specific goals and multiple domains to achieve a vibrant society, a prosperous economy.

The government aims to launch 20 projects in partnership with the private sector next year, according to minister of finance Mohammed bin Abdullah Al-Jadaan. These would be in addition to water, sanitation, education and health sectors, and privatisation of a number of services, in an effort to reduce the burden on public finances and raise efficiency in the private sector, especially as privatisation is a priority for the government.

A number of social programmes such as Citizen’s Accounts, "Almwatin Account”, will continue, while the Ministry of Health has started launching the "Mawid" platform, which benefits 20 million beneficiaries in booking appointments through the app without having to go to the hospital, as part of its Vision 2030 goal to raise the health standards and well-being of Saudi citizens.

In addition, a number of mega projects targeting the country’s infrastructure is underway, including Neom, Qiddiya, and the Red Sea project.

To that end, the Public Investment Fund, which is managing the Qiddiya project, 334 square kilometres west of Riyadh, approved a new board of directors to expedite the project.

The government has also moved swiftly to incentivise investments in manufacturing and mining, financial services, IT, tourism, entertainment and sports, apart from financing facilities to encourage private sector investments in tourism.

“In addition, the tourist visa system was launched, allowing visas to be obtained via an e-platform and at airports and land ports. Another investment fund has been established to focus on entertainment, culture, sports and tourism,” according to the 2020 budget.