Saudi stock exchange seeks to raise US$1bil


Huge offering: An investor monitors the market at the Saudi Stock Exchange. The Riyadh-based bourse plans to sell a 30% stake, or 36 million shares. ― AFP

RIYADH: Saudi Arabia is keeping the home fires burning for regional public offerings, readying what could be the biggest sale of shares by a stock-exchange operator since Euronext NV.

Saudi Tadawul Group Holding is seeking to raise as much as US$1bil (RM4.19bil) after setting the price range for an initial public offering (IPO) at 95 riyals (US$25.32 or RM105.98) to 105 riyals (RM117.17) per share, the company said.

The Riyadh-based bourse, on which oil giant Saudi Aramco trades, plans to sell a 30% stake, or 36 million shares.

The offering comes amid an IPO boom, with companies around the world raising a record of more than US$600bil (RM2.5 trillion) this year.

Against that backdrop, Saudi Arabia has been among the leaders in the Middle East, listing private and family-owned firms as well as companies such as ACWA Power International, backed by the kingdom’s wealth fund, and Saudi Telecom Co’s Internet-services unit.

Neighbouring Abu Dhabi and Dubai have also been stepping up efforts.

“This will surely keep investors on Tadawul excited,” said Junaid Farooq, a fund manager at Frontier Investment Management Partners Ltd in Dubai.

“Government policy is highly supportive of private businesses listing on the exchange and there are over 60 planned IPOs in the pipeline over the next three years.”

Tadawul’s IPO has been on the cards since at least 2016, when it hired HSBC Holdings Plc as an adviser. It put the offering on hold while the exchange went through a process of increasing access for foreign investors, and then staged the listing of Aramco in 2019, the largest ever.

The process was resumed earlier this year and Tadawul replaced HSBC with Citigroup Inc, JPMorgan Chase & Co, and SNB Capital as financial advisers and global coordinators.

It’s set to be the biggest offering in the exchanges sector since Euronext’s US$1.2bil (RM5.02bil) IPO in 2014.

An average of 254 million shares were traded each day on the Tadawul over the past year, with a daily value of US$2.5bil (RM10.5bil). The exchange’s trading debut is expected in December.

“Both market values and trading liquidity are at a record high,” Farooq said. “The former feeds into the latter, so optically speaking seems like a great time to monetise” the company.

The benchmark Saudi stock index fell 1.9% on Sunday as Friday’s retreat in oil prices weighed on market sentiment. ― Bloomberg

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