Four Saudi Arabian companies have drawn a combined 659 billion riyals ($176 billion) in orders for their initial public offerings, as fund managers flocked to share sales that have offered near-guaranteed returns over the last two years.
The demand for new IPOs — that’s exceeded orders for Saudi Aramco’s record issue in 2019 — is also weighing on the kingdom’s stock market. The Tadawul All Share Index is trailing its emerging-market peers for the first time since the pandemic and has fallen almost 8% from its March peak — partly because of investors who’re holding on to cash to invest in the offerings.
Institutional investors put 341 billion riyals of orders for the 2.86 billion-riyal IPO of Dr. Soliman Abdul Kader Fakeeh Hospital Co. earlier this month, data compiled by Bloomberg show. Saudi Manpower Solutions Co. drew orders worth 115 billion riyals, or 128 times more than the shares made available to fund managers.
Rasan Information Technology Co., one of the first fintech firms to go public in Riyadh, received orders of 108.6 billion riyals for its 841 million riyal IPO, while water treatment firm Miahona’s listing was covered 170 times by investors, with 94.4 billion riyals in orders.
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