JEDDAH, 18 December 2004 — The Saudi Capital Market Authority (CMA) has announced that shares in Saudi Arabia’s second mobile phone operator Ettihad Etisalat will start trading on the Kingdom’s stock exchange on Monday.
According to stock market sources, the margin of 10 percent up or down, which is applicable for other shares, will not be applicable for Etisalat shares for the first day of trading.
But from the second day, the trading will be normal starting with the highest price and then the 10 percent limit will be enforced.
Saudi shares also continued to show strong performance last week following the recent downward correction. The Tadawul All-Share Index climbed 6.8 percent this week, closing on Thursday at 8,175.76 points propelled by large blue chip gains, particularly banks, industry and the telecom sectors.
Encouraged by the robust performance of the Saudi equity market in recent quarters, some of the major local firms are considering to go public in the coming months, which include Al-Bilad Bank, National Company for Cooperative Insurance (NCCI), Al-Marai Dairy, SADAFCO (Saudi Haleeb), Saudi Arabian Mining Company (Maaden), Al-Marafiq, and National Commercial Bank.
Etisalat’s initial public offering in November was oversubscribed 51 times, reaching a whopping SR51 billion ($13.6 billion).
“This is the biggest IPO in the history of the Saudi stock market,” Issa Al-Issa, chief executive of Samba Financial Group which managed the IPO, said at the time.
Twenty million shares were on offer at SR50 ($13.3) each, totaling SR1 billion ($266.6 million). But the number of applicants reached a staggering 4.28 million, he said. The minimum per person was set at 10 shares, and the offering was limited to Saudi individuals.
Bankers expect the shares to rise to over SR200 once trading starts.
In early December, Saudi Arabia established Ettihad Etisalat as a Saudi joint-stock company with a capital of SR5 billion.
Commerce and Industry Minister Dr. Hashem Yamani, who made the announcement, said the Riyadh-based company would have a capital of SR5 billion divided into 100 million shares.
Etisalat has also disclosed its plan to raise its capital by 40 percent to SR7 billion.
The Saudi government awarded the consortium in August, which is partly owned by the UAE’s telecoms monopoly Etisalat, the permit to set up and operate a mobile phone network worth SR12.2 billion ($3.25 billion).