JEDDAH, 21 February 2006 — Shares of Yanbu National Petrochemical Company (YANSAB) soared 1,122 percent on debut on the Saudi stock market yesterday. The shares were the main target for Saudi investors in yesterday’s trading session. Anticipating the big rush for YANSAB’s shares, the Saudi Capital Market Authority (CMA) allowed the trading in the share 45 minutes before its debut on the market in yesterday’s morning session and 30 minutes before the evening session in order to avoid a logjam of the network.
The pressure on the share, however, forced the CMA to extend the trading on the share for an hour and a half after the market closed. YANSAB shares, with a face value of SR50, opened at SR725 and reached as high as SR750 before closing at SR611, down 18.53 percent from the peak. Over SR5.58 billion YANSAB shares changed hands on the first day of trading when it was listed as 78th company on the Tadawul.
Faisal H. Alsayrafi, president & CEO of Financial Transaction House (FTH), told Arab News that “the opening session for YANSAB witnessed a significant bid-ask spread along with low trading volume. This mainly represents small investors setting random prices as a quick profit-taking mechanism. This has become a common IPO (initial public offering) price performance in the local stock market after which the prices stabilize at a level reflecting the true demand of institutional and large-scale investors.”
Alsayrafi added, “There will be a sharp correction to the range of SR500-SR600 during the first few trading sessions until the stock price of YANSAB initiates its proper trend.”
YANSAB shares failed to ignite the Tadawul All-Share Index as it closed 52.81 points higher at 19,923.78 and failed to break the 20,000 barrier as was expected.
Saudi Basic Industries Corp. (SABIC) offered 39.4 million shares, or 35 percent, in its subsidiary YANSAB for SR50 ($13.3) each. The IPO closed on Dec. 29.
Nearly half of the Saudi population pumped SR5.9 billion in YANSAB’s IPO.
SABIC owns 55 percent of YANSAB shares.