More Saudi IPOs Price at Top of Range as Demand for Deals Surges - Bloomberg
Two companies in Saudi Arabia set final offering pricing for their IPOs at the top end of a range on Sunday, underscoring the booming demand for share sales in the kingdom.
Elm Co., a digital security firm owned by Saudi Arabia’s sovereign wealth fund, is expected to raise $820 million, while Scientific & Medical Equipment House Co. may garner $83 million.
Share sales in Saudi Arabia have seen huge investor demand in the past year, with most IPOs getting priced at the top of offering ranges and then the shares surging on their trading debut. The Saudi benchmark index has jumped about 9% this year, extending its 2021 gains of 30%.
The pipeline for IPOs in the kingdom is “deeper than ever,” the stock exchange’s Chief Executive Officer Khalid al Hussan said in an interview in December. He said “it will be even better” in 2022, adding that technology, health care and education companies are among the newcomers to the market.
Saudi Arabia’s economy, the biggest in the Middle East, has been boosted by the surge in oil prices to over $85 a barrel and the government easing coronavirus lockdowns. Some of the biggest IPOs last year included offerings by ACWA Power, Solutions by STC and Saudi Tadawul Group.
And for Goldman Sachs Group Inc. the kingdom will remain the busiest of the Middle East’s stock markets, even as the United Arab Emirates pushes more companies to go public.
Sunday IPO pricing:
- Elm will sell shares at 128 riyals apiece after institutional book-building
- It marketed shares at: 113 riyals to 128 riyals
- Scientific & Medical Equipment will sell shares at 52 riyals apiece after institutional book-building
- It marketed shares at: 45 riyals to 52 riyals
Saudi shares hover near multi-year highs; Qatar falls | Reuters
Stock markets in the Gulf ended mixed on Sunday, with the Saudi index hovering near a 15-year high amid rising oil prices as geopolitical turmoil exacerbated concerns over tight energy supply.
Saudi Arabia's benchmark index (.TASI) gained 0.7%, with petrochemical maker Saudi Basic Industries Corp (2010.SE) rising 1.5% and oil giant Saudi Aramco (2222.SE) closing 0.7% higher.
The kingdom's energy index (.TENI) was up 0.6%.
Separately, Saudi Arabian digital security firm Elm, owned by the kingdom's sovereign wealth fund, is set to raise 3.07 billion riyals ($818.27 million) after pricing its initial public offering at the top of its indicative price range. read more
The country's bourse operator Tadawul said in December it had 50 applications from companies for IPOs this year and is considering whether to allow blank-cheque companies, known as SPACs, to list. read more
In Qatar, the index (.QSI) fell 0.1%, hit by a 1.8% fall in sharia-compliant lender Masraf Al Rayan (MARK.QA) following a decline in its annual profit.
Outside the Gulf, Egypt's blue-chip index (.EGX30) lost 0.4%, extending losses for a fourth session, pressured by a 3.2% fall in Talaat Mostafa Holding (TMGH.CA).
OPEC+ Is Being Way Too Optimistic About Its Supply Targets - Bloomberg
As a new month comes into sight, so too does another meeting of the OPEC+ group of oil producers, who are seeking to balance the oil market by gradually adding back the supply they removed almost two years ago in response to the first wave of Covid-19.
With one or two notable exceptions — the November gathering that saw the group refuse customers’ requests for a bigger-than-planned output increase being the most obvious — the virtual get-togethers have become almost routine, with the biggest surprises they have generated being their brevity.
Don’t get me wrong, I’m all in favor of a few unexciting meetings.
The group is expected to agree to add another 400,000 barrels a day to supply in March — they already have a similar increase agreed for February — but are likely to fall even further behind their target when it comes to actual production. They’ve been struggling to keep pace with their plans to increase supply since first adopting them. Actual increases have lagged behind the target in three of the five months so far.
Saudi Wealth Fund Rakes In $5 Billion as Demand For Stocks Booms - Bloomberg
Saudi Arabia’s plan to sell off stakes in local companies held by its sovereign wealth fund is already paying dividends -- it’s set to rake in about $5 billion over three months.
The Public Investment Fund is set to raise $820 million from selling a stake in digital security firm Elm Co. next month after pricing the share sale at the top of the pricing range. That’s in addition to the $3.2 billion it raised from selling shares in Saudi Telecom Co., the largest secondary offering in the Europe, Middle East and Africa region last year. It also raised $1 billion from selling a stake in the Saudi stock exchange in December.
Share sales in Saudi Arabia have seen huge investor demand, with most IPOs getting priced at the top of offering ranges and surging on their trading debut. The Saudi benchmark index has jumped about 9% this year, extending its 2021 gains of 30%.
Proceeds from the share sales will be a welcome boost for the PIF, which is planning to invest about $40 billion into the Saudi economy this year as it looks to drive Crown Prince Mohammed Bin Salman’s plan to diversify the country’s economy away from oil by investing in areas like entertainment and tourism that barely existed in the kingdom before 2016.
The sales also mark a shift in strategy. For decades a sleepy holding company for government stakes in local firms, its looking to recycle its capital, selling off shares in companies it has held for years to invest in new firms. It still holds almost $140 billion of Saudi equities, including large stakes in Saudi National Bank, Saudi Arabian Mining Co., and Saudi Electricity Co.
At the same time, the PIF is planning to plow deeper into global equity markets this year by investing about $10 billion more into listed stocks.
Healthy 2021 bank results reinforce UAE’s economic recovery | Banking – Gulf News
Financial results of top UAE banks for full year 2021 points to sustained economic recovery supported by key financial sector indicators such as improved credit quality, higher margins, greater profitability and high levels of liquidity that will support future credit growth.
Key financials of banks such as First Abu Dhabi Bank (FAB), Emirates NBD (ENBD) and Dubai Islamic Bank (DIB) showed these institutions maintained strong profitability, high credit quality and improving margins amid challenging economic conditions posed by the pandemic and low interest rate environment.
FAB, UAE’s largest bank reported a full year 2021 Group net profit of Dh12.5 Billion, up 19 per cent on year-on-year and posted an overall credit growth of 6 per cent year on year indicating improved credit offtake.
Kuwait’s Jazeera Air Approves $3.4 Billion Airbus Aircraft Order - Bloomberg
Jazeera Airways’s board approved a deal to purchase of 28 narrow-body planes from Airbus SE as the Kuwaiti carrier’s expands its network to include long-haul routes.
The value of the agreement is $3.4 billion and comprises 20 A320neos and eight A321neos, according to a statement. The companies had signed the pact at the Dubai Airshow in November.
Jazeera, whose board also approved an agreement to buy two CFM spare engines in a $32.2 million deal, said deliveries of the Airbus aircraft will be determined at a later stage. The carrier already operates an all-Airbus fleet of original-generation A320s and eight A320neos.
The airline, which laid off about 500 employees in 2020, is in recovery mode after the coronavirus pandemic grounded flights, rehiring staff who want to rejoin. Jazeera’s third-quarter earnings wiped out first-half losses, while cash reserves are at an all-time high.
The shares have jumped 15% this year, extending its 2021 gains of 80%.
Saudi digital security firm Elm set to raise $818 mln in IPO | Reuters
Saudi Arabian digital security firm Elm is set to raise 3.07 billion riyals ($818 million) after pricing its initial public offering at the top of its indicative price range.
Elm, owned by the kingdom's sovereign wealth fund, said on Sunday it priced the deal at 128 riyals a share, against an indicative price of 113 to 128 riyals per share. It is selling 24 million shares in the deal.
Fully owned by the Public Investment Fund, the company provides secure e-business services and information technology, as well as project support services and government project outsourcing in Saudi Arabia, according to its website.
Saudi Arabia has had a surge in IPOs since it listed oil giant Saudi Aramco (2222.SE) in a record $29.4 billion listing in 2019.
The country's bourse operator Tadawul, which also listed last year, said in December it had 50 applications from companies for IPOs this year and is considering whether to allow blank-cheque companies, known as SPACs, to list.
