Private school operator’s IPO sees weak demand

JEDDAH: A Saudi private-school operator’s initial public offering (IPO) last month attracted less demand than recent previous sales in the kingdom, said two people with knowledge of the matter, an indication that investors abroad are cautious about the potential economic aftermath of dissident columnist Jamal Khashoggi’s murder a month ago.

Purchase orders in National Co for Learning & Education’s (NCLE) 247 million-riyal (RM275.8 million) sale of a 30 per cent stake totalled less than double the stock offered to institutional investors.

That compares with buyers seeking eight times available stock in Leejam Sports Co’s US$218 million (RM911.2 million) share sale in August. The fitnessclub chain received strong demand from foreign institutional investors, who were mostly absent in the case of NCLE.

Bankers were marketing NCLE’s shares in a tough environment, with a volatility measure for the main Saudi stock gauge in mid-last month climbing to the highest level since early 2016 in the wake of Khashoggi’s death at the kingdom’s consulate.

Foreigners and local individuals have accelerated stock sales amid concerns the murder will prompt international sanctions against Saudi Arabia.

The main stock gauge has frequently ended on a high note as the disposals were countered by stepped-up purchases from institutional investors based in the kingdom.