The gains of the last 5 IPOs in the Saudi market jump 130% .. 43.6 billion riyals

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The last five offerings in the Saudi market, the “main market”, have achieved positive performance since the beginning of their offering, as the market value increased widely by 43.56 billion riyals, in light of a positive atmosphere for market transactions during more than a year and a half.
According to the monitoring unit of the reports in the newspaper, “Al-Eqtisadiah”, the market value of the last five proposals (not including funds), increased by an average of 130 percent over its evaluation during the subscription period.
Traders in the market were not accustomed to the new offerings achieving large gains, especially if they were compared to the pre-2015 IPO period, which often traded below the offering price.
This may be due to the new allocation method by directing most of the offering to investment funds, which now amounted to about 90 percent of the offered shares, which exceed the nominal value of ten riyals, especially with the order book building system, through which the offering price is determined.
Since 2020, the main market has witnessed the launch of five companies: (Dr. Sulaiman Al-Habib Group, Amlak International Real Estate Finance, Bin Dawood Holding, Al-Khorayef Water and Energy Technology, and finally Theeb Rent a Car).
The value of these companies at the time of the offering amounted to about 33.44 billion riyals, while the value of these offerings, according to the closings of the July 15th session, is estimated at about 77 billion riyals, meaning that the market value of the last five subscriptions increased by 43.56 billion riyals.
If we take, for example, an individual investor or a financial institution that has subscribed in the last five offerings in the Saudi market at a value of 100,000 riyals per offering (total half a million riyals), the total return from the market increase only is about 86.6 percent (933.1 thousand riyals), during about 16 months.
It is expected that the second half of the year will witness an acceleration in the pace of IPOs, after the Capital Market Authority announced the approval of the offering of 11.1 percent of the shares of the International Water and Energy Works Company “ACWA Power”, as well as the offering of 20 percent of the Arab Company for Internet and Communications Services “STC”. Solutions”, in addition to offering 30% of the Arab Technical Contracting Company
This comes within the authority’s strategy, which aims to list 68 companies and funds in the financial market within three years (from 2021 to 2023), including the listing of 20 companies this year, 24 companies in 2022 and 24 other companies in 2023.
In detail, the shares of Dr. Sulaiman Al Habib Group have come the most since they were put on the market, compared to the rest of the offerings, which were covered by the monitoring, as its shares rose by 222 percent to reach 56.35 billion riyals, compared to a market value of 17.5 billion riyals at the offering in March 2020.
It was followed by Theeb Car Rental Company, with a market value of 3.07 billion riyals, compared to 1.72 billion riyals at the time of the offering, an increase of 79 percent, knowing that the company was launched last March, about four months ago.
Third comes the Al-Khorayef Water and Energy Technology Company, as the company’s market value rose by about 1.4 billion riyals to reach 3.2 billion riyals, an increase of approximately 77.8 percent, after it was put up by about four and a half months.
Amlak International Finance comes fourth, after the stock achieved market gains of 42 percent, reaching a market value of 2.06 billion riyals, compared to about 1.45 billion riyals before its shares were traded a year ago.
Finally, the shares of Bin Dawood Holding, which achieved market gains of 12.3 percent, are the lowest among the new offerings, despite their launch in October 2020, while we find that the stock’s performance for the current year did not interact with the emerging market trend.
Economic Reporting Unit





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