DUBAI: Bank Nizwa, Oman’s first listed Islamic bank, surged on its market debut, although traders warn selling pressure from retail investors could curtail further gains in the coming days.
The stock ended 12.8 percent higher, with 87 million shares changing hands. The most shares traded on any day on the Muscat benchmark index in the last two years was 47.2 million. Bank Nizwa is not yet included in the index.
“It was very impressive. But there was huge selling pressure on the stock, with a lot of retail investors offloading today,” said Adel Nasr, brokerage manager at United Securities.
Institutions and high net worth investors are buying the stock, Nasr added, but the selling pressure is likely to result in a drop-off sooner rather than later.
“The initial public offering (IPO) was priced at par and therefore most of the market participants expected it to shoot up in the first few days,” Shakeel Sarwar, head of asset management at Securities & Investment Co. (SICO), said.
“However, since the IPO is dominated by retail investors, I also expect the second round of profit taking to begin soon.”
The bank raised 60 million Omani rials ($155.9 million) from its 40 percent IPO last month, which attracted bids worth more than 11-times the size of the issue during the subscription period.
The index dipped 0.5 percent, ending a three-session winning run, as Ominvest, which slumped 5.6 percent, dragged.
Oman Arab Bank, in which it owns 51 percent, has postponed its planned initial public offering to September, according to the Oman News Agency.
Egypt’s benchmark index shed 0.4 percent in low volumes amid investor caution before a presidential run-off vote that has polarised the nation and continued political haggling over a new constitution.
“Everyone is waiting for the next 10 days to pass to see what is happening,” said investment analyst Nader Khedr. “There are no foreigners in the market and there is no liquidity.”
In Abu Dhabi, the index gained 0.6 percent.
Etisalat climbed 2.8 percent to a 10-week high, extending gains since a local Arabic-language newspaper said the UAE government may soon allow its shares to be owned by foreigners - a story the telco denied in a statement.
Etisalat’s shares are currently restricted to UAE nationals only, with institutions barred.
Aldar Properties and Sorouh Real Estate added 1.8 and 1 percent respectively. The pair have appointed advisers for their proposed merger and begun a due diligence process which will take ‘a number of months’, a statement from Aldar said after the close of trading.
Dubai’s benchmark rose for a fourth session, up 0.2 percent.
Qatar slumps a fresh eight-month low, falling 0.2 percent. The exchange has finished down in eight of its last nine sessions.
Kuwait’s index rose 0.2 percent, its second gain since hitting a 16-week low last week. Bahrain climbed by 0.5 percent, extending gains for a third session.
