JEDDAH: Twenty-seven companies sold part of their shares through initial public offerings (IPOs) in 2007 compared to 10 the previous year, registering a 170 percent increase in IPOs, according to the annual report issued by the Capital Market Authority (CMA) yesterday.
The total value of stocks floated during 2007 was SR40.2 billion against SR20.65 billion in 2006, an increase of 94.7 percent, the report said. The value of public offerings in 2007 was SR22.63 billion, 116.6 percent more than the previous year.
It added that 19 companies offered their shares to the public last year without premiums. Banks collected SR78.8 billion from investors during IPOs last year. The number of companies listed on the bourse rose from 73 in 2004 to 111 in 2007.
There were 74 funds for investing in international stocks and 35 for local stocks in 2007, the report said, adding that the assets of investment funds rose by 24.8 percent to SR105 billion in 2007 against SR84.2 billion in 2006. “During 2007 the CMA adopted a number of important steps to complete organizational aspects of the market,” said Abdul Rahman Al-Tuwaijri, chairman of CMA. They included the rules and regulations relating to merger and acquisition, he added.
He said the CMA restructured the market with 15 sectors, instead of eight, in accordance with the activities of different listed companies. “These measures were taken to develop and modernize the market and reduce risk,” Al-Tuwaijri said.
He added that the Saudi Capital Market Company with a capital of SR1.2 billion was formed to separate supervision from operation. “The new exchange system helps dealers to follow up their deals and make sure they are done in an appropriate manner,” he added.
The CMA also announced its plans to organize more IPOs in 2008, adding that new IPOs would be scheduled taking into account the interests of market and investors. “We’ll license more financial companies and develop electronic monitoring of stock exchange,” it said.
The CMA, the report said, also intends to set up a specialized department to deal with technical violations, especially through the Internet and mobile phones, such as providing misleading information by unlicensed persons. There is another plan to develop an inspection program in cooperation with a specialized American association.