DUBAI: Saudi Aramco could grant shares to employees in any forthcoming initial public offering, according to an analysis of the company charter it adopted at the beginning of the year.
The new charter also allows Aramco to issue different classes of shares, with the possibility of preferred stock paying higher dividends but with fewer voting rights, the analysis shows.
The revelations about the new corporate set-up at the Kingdom’s leading company, and the biggest oil exporter in the world, come in a paper for the Arabia Foundation, an American think-tank based in Washington DC, by Ellen Wald, non-resident scholar at the foundation and author of the forthcoming book “Saudi Inc.”
Wald and a team at the Foundation have translated and analyzed the charter document — previously available only in Arabic from Aramco — and highlighted what it means for the forthcoming IPO, which could be the biggest in history.
In addition to the provisions on employee and preferred shares, the analysis of the charter, adopted in January, highlights the fact that plans for the IPO are progressing and that Aramco plans to list shares on domestic and possibly foreign exchanges “in the near future.”
It spells out that Aramco’s future remains within the sectors of energy and petrochemicals, and will not become an arm of the Saudi government operating in wider industries.
It also outlines levels of protection for investors against state influence on the company, though concluding that “the state will have overwhelming influence on the board.”
An Aramco spokesman said he believed the analysis to be based on an accurate translation of the Arabic document. He added that there was no obligation on Aramco to publish an English version, though this might be available later.
The paper will add further fuel to the debate about the forthcoming IPO and its place within the Vision 2030 strategy to diversify the Saudi economy away from oil dependency.
Wald said: “Significantly, the charter provides insight into the future Aramco initial public offering and the ways it will benefit the Saudi economy and Saudi people during and after the state-led economic transformation. Although the charter does not directly inform on Aramco’s potential valuation, it raises important questions for future valuation.”
The implications for around 55,000 current Aramco employees — most of them Saudi citizens — will be significant.
“Providing Aramco stock to Saudi employees of Aramco could infuse the economy with cash from diffuse sources. This would decentralize wealth, increase commercialism (and private spending), raise real estate values, and perhaps encourage domestic investment in local small businesses. This infusion of wealth into private hands in Saudi Arabia, coupled with private and pension-plan purchases of Aramco stock, would mean that a large portion of Saudi Arabia would acquire a personal stake in the success and future of the largest company in the Kingdom,” Wald said.
“The opportunity for Saudis to own shares in Aramco would be an important contribution to the overall economic transformation of Saudi Arabia, which is currently a primary aim for the Saudi government. The government’s economic transformation plans are, in part, designed to incentivize the people to take a larger stake in their own economic futures,” she added.
The provisions on what kinds of shares can be offered in any further IPO could also have an effect on the eventual valuation of the company. “Although the charter only specifies one class of common stock, Aramco may offer a second class of preferred shares in the future. Preferred shares would limit voting rights but increase dividends, potentially indicating a higher valuation for Aramco while maintaining state control over the Aramco board,” Wald said.
The issuance of preferred shares would require a special shareholder meeting to approve the conversion of common shares.
“Preferred shares do not confer shareholder voting rights to the shareholders, but preferred shares do grant a higher share of the net profit of the company. In other words, preferred shares would offer a higher dividend, if the company creates them,” said Wald.
Higher dividend shares would affect the valuation of the company, which has also been a matter of debate. Some observers have suggested Aramco might struggle to make the $2 trillion estimate put on it when the IPO plans were announced two years ago.
Saudi Aramco may create employee shareholders says US think tank
Saudi Aramco may create employee shareholders says US think tank
- New Aramco charter outlines levels of protection for investors against state influence on the company
- Aramco has around 55,000 employees, mostly Saudi citizens
UAE, Kuwait and Egypt extend non-oil growth in December: PMI survey
RIYADH: Non-oil business activity across the UAE, Kuwait and Egypt expanded further in December, supported by rising new orders and steady demand, economy trackers showed.
In its latest report, S&P Global revealed that the UAE’s Purchasing Managers’ Index eased slightly to 54.2 in December from a nine-month high of 54.8 in November, remaining firmly in expansion territory.
A PMI reading above 50 indicates an expansion in non-oil business activity, while a figure below 50 signals contraction.
The UAE’s non-oil sector performance aligns with broader trends across the Middle East and North Africa, where economies continue to pursue diversification efforts aimed at reducing reliance on crude revenues.
Saudi Arabia led the PMI readings in the region in December, with the Kingdom recording 57.4, supported by rising new orders, continued growth in business activity and expanding employment.
Commenting on the UAE data, David Owen, senior economist at S&P Global Market Intelligence, said: “The UAE non-oil sector concluded 2025 with a solid upturn, marking a year of robust but somewhat tempered growth in business conditions.”
He added: “Positively, firms finished the year with two of their best months of activity growth, as the survey data suggested that sales were rising much faster compared to their low point in August.”
According to the report, the pace of business expansion in December was among the fastest recorded during the year, with more than a quarter of surveyed companies reporting month-on-month increases in output.
Surveyed non-oil firms attributed the growth in activity to rising new business intake, driven by improving market conditions, supportive government policies, increased customer numbers, and stronger international demand.
Some companies reported subdued sales, citing intensifying competition and ongoing economic uncertainty.
“Firms took encouragement from signs of increased customer spending, rising tourism, greater technology adoption and supportive government policies,” added Owen.
Companies also reported mounting cost pressures in December, with survey data pointing to the fastest rise in overall input prices in 15 months.
Respondents highlighted above-average increases in salary expenses, along with higher transport and maintenance costs.
Cost pressures also affected inventory management, with firms reporting a notable decline in stock levels.
Employment growth remained relatively subdued at the end of the fourth quarter, with hiring only marginal and weaker than in November.
“December was also characterized by an acceleration of cost pressures and leaner inventory strategies, indicating that many firms were feeling the pinch on their balance sheets. Additionally, reports of heightened competition and challenges in finalizing new work highlighted ongoing headwinds for the non-oil sector as it heads into 2026,” added Owen.
Looking ahead, companies remained optimistic, although confidence eased and was among the lowest levels seen in the past three years.
In the same report, S&P Global said Dubai’s non-oil economy ended the year on a positive note, with the emirate’s PMI at 54.3 in December, slightly down from 54.5 in November.
Kuwait confidence at 2-year high
In a separate publication, S&P Global said business confidence among non-oil firms in Kuwait hit a two-year high in December.
The country’s PMI rose to 54 in December from 53.4 in November, driven by sharp and accelerated increases in output and new orders.
Marketing activities and the launch of new products were cited as key factors supporting growth during the month.
New orders increased for the 35th consecutive month in December, with the pace of expansion the fastest since May.
Although employment increased, hiring was not sufficient to prevent a further build-up in backlogs of work.
“The Kuwaiti non-oil private sector has been building growth momentum through the final quarter of 2025 and is in a strong position as 2026 gets underway. In fact, companies are buoyant about prospects for the coming year, with business optimism among the highest since the survey began in 2018,” said Andrew Harker, economics director at S&P Global Market Intelligence.
He added: “New orders continued to flow in quickly in December, and despite efforts by companies to expand their staffing levels accordingly, backlogged work accumulated to the largest extent on record. This suggests that output will need to be ramped up further in the months ahead.”
Egypt stays in expansion zone
In another report, S&P Global said Egypt’s PMI eased to 50.2 in December from a 61-month high of 51.1 in November.
The index remained above the 50 thresholds for the second consecutive month, signaling a sustained improvement in the health of the non-oil private sector.
Firms benefited from increased new orders in December, supporting a modest expansion in output, although growth in both areas slowed compared to the previous month.
“Improvements in order books have been a clear factor behind strong business performances over the past few months,” said Owen.
He added: “The uplift in sales arrived amid a softening of inflationary pressures in the Egyptian economy, which has enabled businesses and consumers to spend with more confidence. Adding to signs of growth spreading, firms’ purchases of inputs increased for the first time in ten months.”
Non-oil companies in Egypt reported a renewed decline in employment during December, with most firms citing difficulties in replacing staff who had left.
The overall reduction in employment was the sharpest in 13 months, though it remained modest.
Despite improving business conditions, firms expressed caution toward future activity.
The outlook for the next 12 months was neutral in December, reflecting subdued confidence during the latter half of 2025.
“The overall upturn in business conditions was softer in December compared to one month ago, suggesting this growth trend should be treated with caution. Firms also face continued uncertainties in the domestic and global sphere, which has made them hesitant to show optimism,” added Owen.
