Saudi stock exchange has 50 IPO applications for 2022
Tadawul Group Holdings kicks off with a strong debut, bringing the index up
Saudi Arabia’s stock exchange has 50 applications from companies for initial public offerings next year and is considering whether to allow blankcheck companies, known as SPACs, to list, Reuters quoted the Saudi Tadawul Group chief executive as saying on Wednesday.
A SPAC, or special purpose acquisition company, raises money to acquire a private firm with the purpose of taking it public and allowing the target to list more quickly on an exchange rather than via a traditional IPO.
Khalid Alhussan told Reuters the exchange was discussing business models and assessing appetite for SPACs in the Kingdom, but added that no legal framework had been proposed as yet.
“We are looking very closely to this recent development (about SPACs) and we absolutely look forward to add this element to our market,” Alhussan said after Tadawul made the debut of its shares earlier in the day.
“We have to make sure that this vehicle is in demand by the investors as well as by the issuers,” he said.
The bourse, which raised about $1 billion through an IPO, priced its shares last week at the top of the range at SR105 each.
“As far as the market momentum, I think the markets are still very solid, in regards to IPOs. It is just a fantastic time for us,” Alhussan said. Saudi Arabia is witnessing a surge in companies interested in selling shares to the public. The Kingdom’s Capital Market Authority Chairman Mohammed Elkuwaiz attributes the growing interest to the government’s efforts to modernize and develop its financial sector under the Vision 2030 plan.
Under this program the CMA had a target to list 20 new companies in 2021 on the Saudi index through public offerings, and the authority had achieved half of this target by the end of the first half of the year, Elkuawiz said.
Interest from companies to sell
shares to the public increased over the past few years with the introduction of the parallel market, known as Nomu, as the main market, Tadawul, targets larger and more mature companies with the ability and willingness to bear big loads in terms of disclosure data and governance.
Daily trading
The Tadawul All Share Index saw a fall of almost 1 percent on Wednesday that was partially offset by a rise in the Nomu parallel index.
TASI closed at 10991.8 points while Nomu increased 0.49 percent to close at 23564.11 points.
Tadawul Group Holdings kicked off with a strong debut, bringing the index up through a share price increase of 12.38 percent.
The closing price stood at SR118 ($31.5), up from SR105.
A top six-day performance was shown in Sadr Logistics as its stock price rose from SR65.62 on Nov.30 to SR114.6 at Wednesday’s closing bell, a record
high for the company.
Among the top gainers, Baazeem Trading Co. was up 9.87 percent, rising for the sixth day in a row.
One of Saudi’s biggest players, Al Rajhi Bank declined 2 percent to close at SR135.8.
Chubb Arabia Insurance Co. and Bank Saudi Fransi dragged the index down, falling 4.51 percent and 4.13 respectively.
Saudi Arabia Refineries Co. lost SR5.8 of its four-day gains, down 3.9 percent.