Tadawul to gain from IPOs of family-run firms



JEDDAH: ARAB NEWS

Published — Thursday 22 November 2012

Last update 22 November 2012 3:22 am

| نسخة PDF Print News | A A

Investors are hoping that a spate of new listings of family-owned businesses will restore energy to Saudi Arabia's stock market.
Analysts, quoted by Reuters, say authorities are encouraging family-owned companies to list on the exchange.
Listing family businesses, many of which are in consumer sectors rather than the capital-hungry banking and petrochemical areas, could lure money back to the stock market by giving investors more choice.
"We get the sense that there is a lot of pressure from the government on family-run businesses to go public," Mahmoud Akbar, a banking analyst at NCB Capital, told Reuters. "It adds depth to the market."
The main Saudi stock index climbed as much as 24 percent in the early months of this year but has since fallen back, standing only 3 percent higher yesterday compared to its level at the end of last year.
"Most analysts agree that next year we will witness slower growth in petrochemicals, banks and telecoms — we are witnessing maturity in the main sectors of the economy, which in return lowers the expectations of exceptional growth," Abdullah Alawi, assistant general manager and head of research at Aljazira Capital, told Reuters.
The market saw six initial public offers of shares worth a total of SR 4.8 billion in the first nine months of this year, compared to five IPOS worth SR 1.73 billion in all of 2011.
Many of the offers have drawn strong demand. Travel agency Al-Tayyar Travel raised SR 1.37 billion from its IPO in May; the offer was 6.1 times oversubscribed. The stock is now up 9 percent from its IPO price.
"We will see a new wave of family companies going for listing soon, to compensate for the lack of growth opportunities in current stocks," said Alawi.

What's happening around Saudi Arabia

RIYADH: A number of parents have complained about the lack of hygiene in schools, expressing fears about the potential spread of the MERS virus with the beginning of the new academic year. This comes in the backdrop of another death due to the deadly...
JEDDAH: Disputes over sharing of property or inheriting family business are common. But Dhahran has witnessed an unusual fight among four brothers — over donating kidney to their youngest brother.Coincidentally, all the brothers were found fit to don...
RIYADH: The Ministry of Justice has quashed rumors over the recent acquittal of a man who had been charged with rape-murder of his five-year-old daughter, warning that anybody trying to defame the judiciary will face strict action, local media report...
JEDDAH: A market in Jeddah offers used clothes and other items, including foodstuff, at throwaway prices. However, the deal may be fraught with risks as the foodstuff could be out of date and the clothes infested with microbes. “Many of the items, es...
JEDDAH: A number of visually impaired citizens are expecting candidates to address their problems and make life easier for them after winning the Dec. 12 municipal elections.A section of these voters have also sought special programs so that they can...
RIYADH: The Ministry of Interior recently launched a series of training programs to upgrade the efficiency of its female staff as a new step to empower women and give them an opportunity to shine in security-related fields.Maha Frehi, the manager of...

Stay Connected

Facebook