RIYADH — Saudi Aramco has topped the list of the largest weighted stocks on the Tadawul All Share Index (TASI) following Sunday's announcement by Crown Prince Muhammad Bin Salman to transfer 4 percent of the oil giant's shares to the Public Investment Fund (PIF), the sovereign wealth fund. Before the Crown Prince's announcement, Aramco's shares ranked third behind Al-Rajhi Bank and Saudi National Bank (Al-Ahli). Saudi Aramco's weight on the index jumped to 20.44 percent after Al-Rajhi was in the lead with 15.61 percent and Al-Ahli was second with 7.29 percent, according to a monitoring of Okaz/Saudi Gazette. The transfer of 4 percent of the state's ownership in Saudi Aramco to PIF is equivalent to transferring 8 billion shares to the PIF ownership, out of the total Aramco shares of 200 billion. The State would continue to control Aramco ownership shares equivalent to 94.18 percent. The transfer of 4 percent of the state's ownership in Aramco shares to the sovereign fund is reflected in calculating all the 8 billion shares transferred to PIF as free shares included in the weight of the main stock market index TASI, after the number of free shares of Aramco calculated in the weight of the index before the transfer of ownership is about 3.54 billion shares, equivalent to 7.28 percent of the TASI. Thus, the percentage of free shares for Aramco increased to 5.77 percent of the total shares of the company, bringing the number of free shares to about 11.54 billion. According to Tadawul, the shares exclude that of government entities, which own 5 percent or more in the listed company; as well as shares that are not allowed to be traded for a period of time; shares due through repurchase by a listed company; shares owned by a member of the Board of Directors, and shares that represent a controlling ownership of 30 percent or more. It is noteworthy that the transfer of 4 percent of state ownership in Aramco to PIF aims to strengthen the sovereign fund's strong financial position and high credit rating in the medium term. The state is still the largest shareholder in Saudi Aramco after the transfer process, as it owns more than 94 percent of the company's total shares.
