Aramco’s expected USD 10 bn secondary share sale could draw at least USD 1 bn in passive inflows from investors tracking the MSCI and FTSE Emerging Market indexes, our friends at EFG Hermes KSA said, according to Bloomberg’s Farah Elbahrawy (watch, runtime: 3:16). The potential offering would raise the oil giant’s freefloat by 0.5 percentage points to a total of 5.5%, including the tradeable portion of the Public Investment Fund’s (PIF) 16% stake in Aramco.

REMEMBER- We could be weeks away from the sale: Aramco is expected to pull the trigger on a secondary sale share as soon as next month, Reuters reported last week. The company has not yet confirmed the offering, which some originally said could be worth as much as USD 20 bn. The newswire expects Aramco to put on a full roadshow to market the offering rather than doing an accelerated book build.

Market reaction: “The stock and the market in general took a little bit of a dip” after the news of the potential offering emerged “because that will require a lot of liquidity from investors into this new offering to support it,” Elbahrawy said.

BACKGROUND- Aramco raised its dividends by 30% in March to a near USD 100 bn for 2023 despite sagging oil prices and lower production. This came days after the PIF doubled up its stake in Aramco to 16%, a transfer of stock worth about USD 164.

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