Saudi Arabia will build the largest sovereign fund in the world


Saudi Arabia will sell the stock market less than 5% of the oil giant Aramco and adopt a sovereign fund of 2.000 billion dollars (1.777 billion euros), the largest in the world, as part of a plan reforms announced Monday.

These announcements were made by the heir vice Prince Mohammed bin Salman who stressed the need for the Saudi kingdom -First economy in the Arab world and exporter of brut- to end vis-à-vis oil dependence.

The plan, presented by Prince Mohammed as a “road map” for the development of the kingdom during the next 15 years, is intended to diversify the Saudi economy, which depends more than 70% of the oil when crude prices are falling for about two years.

“We plan to sell less than 5% of Aramco. Aramco size is very large, “said the king’s son in reference to the first oil company in the world. This would be the highest market capitalization in the world.

Moreover, he added, “we plan to create a sovereign fund of 2.000 billion dollars,” whose “assets come from the sale of a small part of Aramco.”

Mohammed bin Salman said he would be the “largest investment funds in the world, by far.”

It dethrone the Norwegian sovereign fund that weighed Monday morning 866 billion dollars, almost 2.5 times less than the planned Saudi funds.

“This fund will control more than 10% of the investment capacity in the world (…) and the volume of its assets represent more than 3% of existing assets,” said the Saudi prince, also defense minister.

Aged 30, the prince also chairs the Council of Economic Affairs and Development, which oversees organ Saudi Aramco, the kingdom economic pillar that controls proven reserves of over 261 billion barrels and employs over 61,000 people.

Initiator of the vast plan of reforms called “Saudi Vision 2030”, he defended the opening of Aramco local and foreign capital, which, according to him, will ensure “transparency” in the management of the oil giant.

“We all have an unhealthy dependence on oil-vis Saudi Arabia, which is dangerous. This has hindered the development of several sectors in recent years, “he insisted, in an apparent reference to criticism of the partial privatization of Aramco.

After Aramco, “it was the turn of the subsidiaries to be introduced on the stock exchange,” said the Prince, assuming a Saudi economy that depends “more oil but (firing) its investment income.”

The Saudi economy, the largest in the Arab world, is expected to grow at 1.2% this year, against 3.4% in 2015.

The collapse of oil prices has forced Gulf states including Saudi Arabia to take unprecedented measures for the reduction of fuel subsidies and the imposition of new indirect taxes.