NCB collects record SR215.76bn in IPO
The IPO is being described by investment analysts as the country’s biggest share offer since the government raised $2.8 billion from the 2007 IPO of Alinma Bank.
Basil Al-Ghalayini, CEO of BMG Financial Group, told Arab News: “With almost 1,600 percent coverage representing SR210 billion injected by over 1.17 million subscribers, this IPO has exceeded by far all expectations.”
He said: “With the slow start at the beginning of the subscription period coupled by the controversy of its readiness for the Islamic banking business, many analysts thought this IPO will be covered three or four times but not to that unprecedented level.”
Al-Ghalayini said: “Thanks to local banks who offered generous leveraging programs to their mega clients who waited until the final days to place their multi billion Riyals commitments.”
Asim Bukhtiar, vice president/ head of research at Riyad Capital, said: “The NCB IPO was expected to be wellreceived and the strong investor demand did not disappoint. Once the shares start trading, it should be positive for the overall market buoyed by a large cap stock. In the past couple of weeks, NCB IPO has been a drag for the broader index as investors freed up cash to buyin to the newly listed shares.”
Bukhtiar said: “The IPO pipeline looks healthy. The budget and yearend dividend announcements in December may possibly shake off investor concerns around weaker oil price.”
The NCB offering came in the wake of the recent $25 billion flotation of Chinese Alibaba group.
The Saudi stock exchange moved up on Sunday, with Tadawul All-Share Index (TASI) rising by 0.64 percent to 10,099.27 points.
The Banking and Financial Services Index surged 0.77 percent.
The Saudi stock market had a remarkable run throughout the first nine months of 2014. However, Tadawul struggled to sustain a level above 11,000 and settled by the end of
October at 10,034.92, down 819.87 points (7.55 percent) over the close of the previous month.
Total equity market capitalization at the end of October reached SR2.04 trillion ($545.16 billion), down by 7.64 percent over the close of the previous month.
The total value of shares traded in October reached SR132.89 billion ($35.43 billion), dropped by 34.10 percent over the month of September.