Saudi Arabia IPOs: Aramco Secondary Offering Weighs on Fakeeh Care’s Debut - Bloomberg
Saudi Aramco’s $12 billion secondary share sale took the shine off the kingdom’s biggest initial public offering of the year.
Saudi health-care group Dr. Soliman Abdel Kader Fakeeh Hospital Co. closed 10% above its offer price of 57.5 riyals ($15.3) in Riyadh on Wednesday as Aramco’s offering drained liquidity from the market. That’s the smallest first-day gain for a listing in the kingdom raising at least $100 million in the past 12 months, data compiled by Bloomberg show.
Fakeeh Care Group’s performance jars with the overwhelming demand for its 2.86 billion-riyal IPO. Institutional investors put in 341 billion riyals of orders, or 119 times the shares made available to them, which was one of the highest levels of demand for an IPO in the kingdom raising at least $500 million in the last five years.
The oil giant Aramco’s secondary offering — one of the world’s biggest in recent years — was sold out shortly after the deal opened.
Recent large stock offerings like those in Aramco and Adnoc Drilling Co. have weighed on liquidity in Middle Eastern markets, along with a rush of IPOs across the region, as investors save their cash for those listings.
Benchmark indexes in Saudi Arabia and Abu Dhabi are lagging global peers this year, with mounting geopolitical tensions and the prospect of higher-for-longer interest rates weighing on sentiment.
In the last year, just two other Saudi IPOs have failed to rise by the maximum 30% allowed on the first day of trading, First Milling Co. and SAL Saudi Logistics Services, according to data compiled by Bloomberg.
To be sure, Fakeeh Care Group’s performance would not be considered below average in most other markets, such as in Europe, where the average first-day gain for IPOs of $100 million or more in the last year was just 7.4%, the data show.
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