16 April 2012
Muscat: The much-awaited initial public offering of Oman's first Islamic bank - Bank Nizwa - will open for subscription on April 23. The bank is offering 600 million shares, with a par value of 102 baisas each, including two baisas for meeting issue expenses. The IPO, which is available for both Omanis and expatriates, is open for subscription for one month until May 22.
The promoters, who have submitted issue prospectus with the Capital Market Authority (CMA), have received an approval from the market watchdog.
As much as 60 per cent of the share offer is reserved for those investors who apply for 100,000 shares or less. And the remaining 40 per cent are reserved for institutional investors or high net worth individuals who apply for more than 100,000 shares. This is aimed at strengthening the participation of retail investors. The shares are expected to be listed on the Muscat Securities Market (after allotment) on either June 6 or 7.
Bank Nizwa, with an authorised capital of RO300 million, has a paid up capital of RO150 million. The bank's 40 per cent paid up capital (or RO60 million) will be offered to the investing public and the remaining RO90 million is brought in by 92 founding members. The issue, which will be offered at a fixed price, is managed by Oman Arab Bank (OAB).
Bank Nizwa founding committee members earlier said that the bank would commence operations by end-July, with three branches - one each in Muscat, Nizwa and Sohar. Over the past months, the bank has been working with its consultants and advisors on implementing the drawn up plans. However, the banking regulator is yet to announce the regulation for Islamic banking.
Core banking platform has been identified and sourcing of other information technology solutions being finalised. The founding committee members are in the process of constituting a four-member Shariah Board. Two members will be from the GCC region, while the remaining two from Oman have been identified. There is substantial unmet demand for Sharia-compliant products in Oman. This, together with the attractive economic fundamentals of Oman and the growth in the Omani banking market, highlights the growth opportunity for Bank Nizwa.
Market sources said that there will be a huge pent-up demand for the initial public offering from the Sultanate's first Islamic bank. The previous issue was of SMN Power, which came out with an IPO of RO24.6 million in September 2011. Although the retail demand was not very high, institutional investors saved the issue on stable dividend prospects.
Al Izz Bank International, the second Islamic bank under formation, is also planning to raise money from the investing public.
The market authority has already received a draft prospectus from Al Izz Bank International.
The stock market regulator has returned the draft with their comments. The bank is planning to float a RO40 million issue, which will be managed by BankMuscat.
These two IPOs will definitely add liquidity to the market, which will help to enhance the market depth.
According to experts on Islamic finance, the Sharia-compliant financial institutions may capture 10 per cent of the market share of the total banking assets within few years.
Oman's banking assets are in the region of $40-42 billion and are growing at a healthy pace.
Muscat: The much-awaited initial public offering of Oman's first Islamic bank - Bank Nizwa - will open for subscription on April 23. The bank is offering 600 million shares, with a par value of 102 baisas each, including two baisas for meeting issue expenses. The IPO, which is available for both Omanis and expatriates, is open for subscription for one month until May 22.
The promoters, who have submitted issue prospectus with the Capital Market Authority (CMA), have received an approval from the market watchdog.
As much as 60 per cent of the share offer is reserved for those investors who apply for 100,000 shares or less. And the remaining 40 per cent are reserved for institutional investors or high net worth individuals who apply for more than 100,000 shares. This is aimed at strengthening the participation of retail investors. The shares are expected to be listed on the Muscat Securities Market (after allotment) on either June 6 or 7.
Bank Nizwa, with an authorised capital of RO300 million, has a paid up capital of RO150 million. The bank's 40 per cent paid up capital (or RO60 million) will be offered to the investing public and the remaining RO90 million is brought in by 92 founding members. The issue, which will be offered at a fixed price, is managed by Oman Arab Bank (OAB).
Bank Nizwa founding committee members earlier said that the bank would commence operations by end-July, with three branches - one each in Muscat, Nizwa and Sohar. Over the past months, the bank has been working with its consultants and advisors on implementing the drawn up plans. However, the banking regulator is yet to announce the regulation for Islamic banking.
Core banking platform has been identified and sourcing of other information technology solutions being finalised. The founding committee members are in the process of constituting a four-member Shariah Board. Two members will be from the GCC region, while the remaining two from Oman have been identified. There is substantial unmet demand for Sharia-compliant products in Oman. This, together with the attractive economic fundamentals of Oman and the growth in the Omani banking market, highlights the growth opportunity for Bank Nizwa.
Market sources said that there will be a huge pent-up demand for the initial public offering from the Sultanate's first Islamic bank. The previous issue was of SMN Power, which came out with an IPO of RO24.6 million in September 2011. Although the retail demand was not very high, institutional investors saved the issue on stable dividend prospects.
Al Izz Bank International, the second Islamic bank under formation, is also planning to raise money from the investing public.
The market authority has already received a draft prospectus from Al Izz Bank International.
The stock market regulator has returned the draft with their comments. The bank is planning to float a RO40 million issue, which will be managed by BankMuscat.
These two IPOs will definitely add liquidity to the market, which will help to enhance the market depth.
According to experts on Islamic finance, the Sharia-compliant financial institutions may capture 10 per cent of the market share of the total banking assets within few years.
Oman's banking assets are in the region of $40-42 billion and are growing at a healthy pace.
© Times of Oman 2012
