Saudi sovereign wealth fund PIF launches stock "sell sell sell" mode to raise funds for the "Vision 2030" plan.

Saudi Arabia's largest sovereign wealth fund, the Public Investment Fund (PIF), has sold a portion of its stake in the country's largest mobile phone operator with a total value of approximately $1 billion. This is the latest move by PIF to raise significant funds for Saudi Arabia's economic transformation plan. It is understood that the Saudi Arabia's largest sovereign wealth fund sold 100 million shares of the Saudi Telecommunications Company (STC) at a price of 38.6 riyals per share (approximately $10.27), representing about 2% of the company's shares. The transaction price was approximately 6% lower than the stock's closing price of 41.1 riyals on Wednesday. The Saudi sovereign wealth fund PIF is one of the core funding entities responsible for driving Saudi Arabia's "2030 Vision" plan, which aims to diversify the Saudi economy away from its reliance on oil. Recent reports suggest that PIF has been seeking to sell its holdings in portfolio companies to raise significant funds. Saudi Arabia's "2030 Vision" is an ambitious national development plan aimed at reducing Saudi Arabia's dependence on oil revenue through economic diversification and social reforms, and promoting sustainable and modern development of the country. The plan was launched by Saudi Crown Prince Mohammed bin Salman in 2016. Key focuses of this vision plan include attracting international investments through large projects like NEOM (the future city project in Saudi Arabia), the Red Sea project, while also developing the tourism industry, high-tech industries, and renewable energy. NEOM includes multiple sub-projects, with the most famous being THE LINE, an envisioned linear smart city in Saudi Arabia completely free of cars, streets, and carbon emissions. THE LINE is planned to accommodate at least 9 million people in a 170-kilometer single building form, with all basic services within a five-minute walking range, powered by 100% renewable energy. In addition, NEOM also includes other significant areas such as Oxagon (an innovative industrial city), Trojena (a winter tourism destination), and Sindalah (a luxury island resort destination). Prior to the recent large-scale sale of STC shares, PIF had further reduced its holdings in the Japanese entertainment and gaming industry leader Nintendo, exacerbating the selling wave of Nintendo's stocks since August. According to Japanese government documents, the Public Investment Fund (PIF) has reduced its stake in Nintendo's Kyoto headquarters from 7.5% to 6.3% and sold over 17 million shares within a six-week period ending in October. Additionally, over the past year, the fund has frequently entered global bond markets for large-scale transactions. With international crude oil benchmarks, such as Brent crude, remaining weak and resulting in a broad softening of diesel and other refined petroleum product prices, leading to high budget deficits for the Saudi government, the need for international funds in Saudi Arabia has become more urgent, leading Saudi officials to reassess the priorities of projects in the near term. Earlier this year, the Saudi government sold a portion of its stake in the international oil giant Saudi Aramco for approximately $12.4 billion. Apart from the telecom giant STC, the sovereign wealth fund has invested in top companies across various industries globally, from the Saudi electricity and utilities company Acwa Power, to the stock exchange operator Saudi Tadawul Group Holding. The sovereign wealth fund also holds a majority stake in the $52 billion commodity giant Saudi Arabian Mining Company, as well as stakes in Saudi Arabia's largest commercial banks such as the National Bank of Saudi Arabia, Riyad Bank, and Alinma Bank. Additionally, the Saudi Arabia's largest sovereign wealth fund PIF also holds shares in several tech giants in the US stock market and other listed companies outside the Middle East, such as Lucid Motors, a North American electric vehicle maker, which may face divestment in the future due to Saudi government's funding pressures. In the Middle Eastern stock markets, secondary offerings are uncommon, indicating a low likelihood for further issuance from Saudi's largest sovereign wealth fund. Previously, PIF had sold a portion of its stake in the Saudi Stock Exchange, and earlier in 2021, raised $3.2 billion through the sale of its stake in STC. In the months leading up to that large-scale sale, Saudi Crown Prince Mohammed bin Salman had stated that the fund should not "permanently" hold investments in local companies. However, following the completion of the sale, PIF will still remain the largest shareholder of the Saudi Telecommunications Company, holding up to 62% of the shares. Wall Street investment banking giant Goldman Sachs, along with SNB Capital, are the joint global coordinators and bookrunners for the Saudi sovereign wealth fund's stock sale.