Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF) has been making some very bright investments all across the globe amid the decrease in valuations created by uncertainties in the market due to novel coronavirus. Reports from UK’s Telegraph suggest that PIF has now increased its stake in UK telecom giant BT as well.
Several sources close to the firm have stated that the Saudi fund which is currently valued at $325 billion has been buying BT’s shares on the open market in recent weeks.
The investment comes at a time when BT’s share prices are at its lowest. Reduced market confidence in BT’s future prospects coupled with extensive economic slump due to COVID-19 has significantly reduced the stock market valuation of the firm, bringing it down to a meager sum of $14.4 billion, far less than what it paid in 2016 to buy its mobile arm EE.
The stake purchases by the PIF is considerably lower than the 5 percent mark at which the fund would be required to report it to the stock market. Though it is gathered that BT advisers have been tracking a new investor in the market for some weeks.
Even though one cannot be certain that PIC is making all the purchases as all the transactions are made via derivatives, but all indications point to Saudi Arabia. It makes a lot of sense to many as there have been reports suggesting that the fund had approached BT with an offer in April.
Saudi Arabia is believed to be holding a position in BT as it invests around the world on companies which it believes have robust structures in an attempt to decrease its dependence on oil revenues.
Since the spread of novel coronavirus, the PIF has revealed having stakes in BP, Shell, Boeing, Live Nation, Disney, Facebook and the Indian telecoms operator Jio Platforms.
Both BT and the PIF have refused to clarify on the matter.
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