Riyadh: As many as 45 Saudi-listed companies have plans to launch initial public offerings (IPO) worth an estimated 40 billion Saudi riyals (Dh39.17 billion) early next year.
Some 29 of these companies have completed all the necessary procedures, including final approval from the market regulator Saudi Capital Market Authority and procedures for the remainder are progressing well. Since mid-2008 a total of 47 companies had unveiled their plans to launch IPOs at a later stage.
Uncertain situation
Of these, 36 companies have not revealed when they will go public. This is mainly attributed to the uncertain global market situation. Only two companies Buruj Cooperative Insurance Company (Buruj) and Khaleejia Takaful Insurance completed their IPOs during the period.
It is expected that three other companies will also announce IPO plans in the next three months. They are Al Harfi Company, Al Sari Industrial Trading Co and Al Tayyar Travel Group.
Developers
Al Harfi plans to float 8.1 million shares (30 per cent) and the IPO was scheduled for January 11. Al Sari announced an IPO for 30 per cent of its shares (9 million shares) on February 1.
Al Tayyar plans an IPO for 30 per cent of its shares or 24 million on February 22.
Most of the 45 companies which announced IPOs for January are from the construction sector. It was followed by the retail and cement sectors.
These companies have plans for the public sale of shares ranging between 20 per cent and 50 per cent.
They include those implementing some of the leading multi-billion-riyal economic city projects such as Prince Abdul Aziz Bin Musaed Economic City of Hail, Jizan Economic City and Knowledge Economic City of Madinah as well as the largest bank in the kingdom National Commercial Bank.
Largest Arab market
Companies planning IPO include Najran Cement, Jizan Refinery, Water and Electricity Company of Jubail and Yanbu (Marafiq), Al Oqair, MedGulf, Al Afiya Oil, Total Recycling, Al Bassami International Group, ORIX Insurance Services, Al Khozami and Al Oujan.
It is noteworthy that there are more than 132 companies listed in the Saudi Capital Market, the largest in the Arab world, with a total capitalisation of over 1 trillion riyals.
The number of companies that launched IPO was the highest in 2007 while it was the lowest in 2008 due to the global economic meltdown.
By Abdul Rahman Shaheen
© Gulf News 2009
