#Saudi Developer Draws $36 Billion in Orders for $336 Million IPO - Bloomberg

Saudi Developer Draws $36 Billion in Orders for $336 Million IPO - Bloomberg

Saudi Arabia’s Dar Al Majed Real Estate Co. drew 135 billion riyals ($36 billion) in orders for its $336 million initial public offering, as liberalized foreign ownership rules spark interest in the kingdom’s property market.

The developer, better known as Almajdiah, priced the offering at 14 riyals per share, the top of the marketed range, it said in a statement. Shareholders are selling a 30% stake, or about 90 million shares, with the pricing implying a valuation of 4.2 billion riyals.

The institutional tranche was 107 times oversubscribed, according to the company. The retail subscription period runs from Aug. 14 to 18.

Almajdiah had demand for all shares in its Riyadh IPO within minutes of books opening last week, Bloomberg News reported. Sinad Holding has committed to subscribe to over 2% of the company’s capital as a cornerstone investor.

Real estate developers such as Almajdiah look set to profit from Saudi Arabia’s push to increase local homeownership under its Vision 2030 reform program, as well as a new law allowing foreigners to buy property in designated zones.

“Local developers, especially those with a strong land bank and that have active projects in tier-1 cities, stand to benefit significantly” from the reforms, said Prasad Chari, senior managing director for equity capital markets at Emirates NBD Capital.

The regulatory changes have also fueled renewed interest from developers exploring IPOs or structured real estate investment funds, Chari said.

Fellow developer Al Ramz has secured regulatory approval to list, while building materials supplier Marketing Home Group is set to raise as much as $109 million with its IPO in the coming weeks.

For listed players, the reforms could translate into re-rated valuations and better access to capital markets, according to Chari. Shares of Retal Urban Development Co. and Saudi Real Estate Co. rallied following the rule changes but have since trimmed some of those gains amid broader weakness in the kingdom’s stocks.

Saudi Arabia remains the Middle East’s most active market for IPOs this year, with firms raising more than $3 billion. Still, performance has been uneven as valuations face scrutiny in a subdued oil price environment. Recent listings by low-cost airline Flynas Co. and hospital operator Specialized Medical Co. remain below their offer prices.

Founded in 1999, Almajdiah builds residential communities primarily in Riyadh. BSF Capital is arranging the offering.

#Dubai's Emaar Properties reports 33% jump in first-half profit | Reuters

Dubai's Emaar Properties reports 33% jump in first-half profit | Reuters

Emaar(EMAR.DU), opens new tab, Dubai's largest real estate developer, reported a 33% rise in first-half net profit on Wednesday, driven by a sharp rise in property sales.

The developer behind the Dubai Mall and the world's tallest building, the Burj Khalifa, reported a net profit attributable of 7.08 billion dirhams ($1.93 billion) for the period ended June 30, up from 5.34 billion dirhams a year earlier.

Dubai's property market is red-hot at the moment as regulatory shifts and premium projects attract global buyers.

Emaar said its property sales increased 46% for the first half compared with the same period last year, reaching 46 billion dirhams.

As of end-June, Emaar's revenue backlog from property sales also increased by 62% to 146.3 billion dirhams.

Gulf equities end mixed on corporate earnings; Egypt on new record high | Reuters

Gulf equities end mixed on corporate earnings; Egypt on new record high | Reuters

Gulf stock markets were mixed on Wednesday as investors assessed a raft of corporate earnings and awaited clarity on the U.S. Federal Reserve's leadership.

Trump said he would name a nominee to replace outgoing Fed Governor Adriana Kugler by the end of the week, and has narrowed the shortlist for Fed Chair Jerome Powell's successor to four candidates.

Expectations of a U.S. interest rate cut strengthened after Friday's weaker-than-expected jobs data, with traders now pricing in a 94% chance of a September cut, up from 63% at the end of July, according to CME FedWatch.

Interest rate moves by the Fed have a significant impact on the Gulf region's monetary policy as most of its currencies are pegged to the U.S. dollar.

The Qatari benchmark index (.QSI), opens new tab gained 0.4% to 11,326, its highest level in more than 2-1/2 years, with most stocks in positive territory. Industries Qatar (IQCD.QA), opens new tab rose 1.1% and AlRayan Bank (MARK.QA), opens new tab advanced 2.3%.

Saudi Arabia's benchmark stock index (.TASI), opens new tab edged up 0.2%, lifted by a 2.1% rise in Saudi Basic Industries (2010.SE), opens new tab and a 5.4% jump in Arabian Centres (4321.SE), opens new tab after the mall operator reported a 34.2% increase in second-quarter net profit. Riyadh Cement (3092.SE), opens new tab slipped 2.8% after posting a 10.8% decline in quarterly net profit.

Dubai's benchmark stock index (.DFMGI), opens new tab slipped 0.2% as most constituents declined. Dubai Islamic Bank (DISB.DU), opens new tab, the UAE's largest Islamic lender, dropped 2.1% and Parkin Company (PARKIN.DU), opens new tab lost 1.1%.

"Markets in the UAE were under pressure as they remained exposed to price corrections after weeks of gains," said Joseph Dahrieh, managing Principal at Tickmill.

The Abu Dhabi benchmark index (.FTFADGI), opens new tab was little changed as the gains in real estate, technology and energy stocks offset losses in industry, health care and telecom.

Aldar Properties (ALDAR.AD), opens new tab climbed 3% and ADNOC Gas (ADNOCGAS.AD), opens new tab, advanced 1.5% after gas processing and sales company reported a 16% rise in second-quarter net profit and declared an interim dividend of $1.792 billion, a 5% increase from a year earlier.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab advanced for a fifth day and rose 0.6% to hit a fresh record high at 35,480. Telecom Egypt (ETEL.CA), opens new tab soared 4.8% and Fawry for Banking Technology(FWRY.CA), opens new tab gained 1.9%.

Meanwhile, Egypt's net foreign reserves rose to $49.036 billion in July from $48.7 billion in June, the central bank said on Tuesday.