Tadawul Group shares open 10% above market price on Riyadh debut
Shares in Saudi Tadawul Group, owner of the kingdom’s $ 2.5 trillion stock exchange, surged more than 20% on Wednesday’s debut as the appetite for Gulf listings grows.
“Today we mark a significant milestone in our transformation,” Khalid Al Hussan, CEO of the Saudi Tadawul Group, told CNBC’s Dan Murphy on Wednesday.
With a price of 105 riyals ($ 27.99) per share and a 121-fold oversubscription, the exchange operator opened Wednesday at 115.4 riyals, 10% above the company’s share price.
“There was great demand for all types of investors – local, [regional] and internationally, “Al Hussan said, adding that public funds, Saudi companies and government accounts from the Gulf and around the world, as well as private investors, participated in the offer.
The sale of shares raised up to $ 1 billion for the group’s sole shareholder, the Public Investment Fund.
The Tadawul Group’s initial public offering, which lasted at least five years, is the second largest of the year after the $ 1.2 billion utility company ACWA Power listed in October. The IPO of Saudi Telcom’s Internet service unit in September also attracted a lot of investor interest and underscores the high level of demand for Saudi IPOs.
“The dynamism of the kingdom’s transformation and the opportunities for Saudi companies to grow and benefit from such transformation have been a great comfort for investors to invest in these companies,” said Al Hussan.
Change of trading day
Both the Dubai Financial Market and Abu Dhabi Exchange announced plans to move trading days from Sunday to Thursday to Monday to Friday in response to the UAE government’s decision to change its working week from next year. Saudi Arabia and the rest of the region are currently following a trade plan from Sunday through Thursday.
Al Hussan said the exchange operator is “very closely watching” the UAE’s decision to change trading days, but no decision has yet been made to follow the UAE’s lead.
This picture from December 12, 2019 shows a view of the sign with the logo of the Saudi Arabia Stock Exchange (Tadawul) in the capital Riyadh.
FAYEZ NURELDINE | AFP | Getty Images
“We will not react to a decision made by the UAE yesterday,” said Al Hussan.
“We keep looking at our trading hours,” he added. “From a capital market perspective, as we speak, we have not seen any concerns from international investors about the US-Saudi Arabia trading days.”
Economic competition between the United Arab Emirates and Saudi Arabia has intensified due to the coronavirus pandemic.
The regional trading capital of Dubai plans to bring 10 government-backed companies public in the coming years, while Abu Dhabi has also seen a number of high-profile IPOs this year and possibly more in the pipeline that will help bring the stock market by nearly 80 % up in the year -dating together.