Oct 12 2006 |
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Shares of new Saudi insurance companies to be put up for sale
12 Oct 2006
Riyadh: The newly licensed 13 insurance companies in Saudi Arabia will have a total capital of 2.6 billion Saudi riyals, of which 936 million riyals will be offered for public sale, said Hamad Sayyari, governor of the Saudi Arabian Monetary Agency (Sama).
"A decision will be taken on the procedures of floating their stakes into public circulation after consultation with the Capital Market Authority. Their stocks will be floated without hurting the stock market," he said, adding that the floatation would go further in consolidating the stability of the Arab world's largest bourse.
On Monday, the Saudi Council of Ministers licensed 13 new insurance companies in a move that will dramatically change Saudi Arabia's insurance market. The insurance and re-insurance firms, approved by cabinet, would be set up as joint stock companies.
According to a statement by Sama, nine of the companies would offer 40 per cent of their stocks for public sale. Medgulf, which tops other companies in terms of capital with 800 million riyals, will float 25 per cent of its stock into circulation.
Sayyari said that licensing of new insurance companies and floating of their stocks are aimed at realising several goals.
They included providing the best possible medical insurance services to the people at reasonable rates, maintaining stability of the insurance market, protecting the interests of both clients and investors as well as ensuring a healthy competition.
By Mariam Al Hakeem
© Gulf News 2006. All rights reserved.
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