Saudi Arabia’s BinDawood Holding sets IPO price range

BinDawood’s IPO marks another major listing for Saudi Arabia’s bourse, the Tadawul. (AFP)
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Updated 13 September 2020

Saudi Arabia’s BinDawood Holding sets IPO price range

  • Company plans to offer 22.86 million existing shares at an indicative pricing of between $22.44 and $25.64
  • BinDawood owns the Danube and BinDawood supermarket brands

DUBAI: Saudi Arabian supermarket retailer BinDawood Holding set an indicative price for its initial public offering, seeking to raise as much as $585 million (2.19 billion Saudi riyals) in a Riyadh listing.
The company plans to offer 22.86 million existing shares at an indicative pricing of between $22.44 and $25.64 (84 riyals to 96 riyals) per share in the planned IPO, according to a regulatory filing on Sunday. It will sell 20 percent of the company through the sale of existing shares.
It targets a valuation of between $2.56 billion and $2.94, according to Reuters calculations.
BinDawood’s IPO marks another major listing for Saudi Arabia’s bourse, as companies tap into Saudi demand for shares since oil giant Aramco’s record IPO last year.
The bookbuilding period for institutional investors will take place between Sept. 13-22, the filing said. The subscription period for retail investors will take place between Sept. 27-29. Allocations of the shares will take place on Oct. 1.
Saudi Arabia is encouraging more family-owned companies to list in a bid to deepen its capital markets under reforms aimed at reducing the kingdom’s reliance on oil revenues.
BinDawood, which owns the Danube and BinDawood supermarket brands, manages over 70 hypermarkets and supermarkets in major Saudi cities including Makkah, Medina, Jeddah, Riyadh, Khobar and Dammam, according to its website.
The BinDawood supermarket chain is focused on the middle-income customers and Muslim pilgrims in the kingdom, while the Danube chain is focused on wealthier customers.


Demand issues ‘to overshadow OPEC+ supply next year’

Updated 29 October 2020

Demand issues ‘to overshadow OPEC+ supply next year’

  • Libya's rising production adding to pressure on oil markets

DUBAI: The Organization of the Petroleum Exporting Countries (OPEC) and its allies will have to contend with a “lot of demand issues” before raising supply in January 2021, given throughput cuts by oil refiners, the head of Saudi Aramco’s trading arm said.
OPEC and its allies plan to raise production by 2 million barrels per day (bpd) from January after record output cuts this year as the coronavirus pandemic hammered demand, taking overall reductions to about 5.7 million bpd. 

“We see stress in refining margins and see a lot of refineries either cutting their refining capacity to 50-60% or a lot of refineries closing,” Ibrahim Al-Buainain said an interview with Gulf Intelligence released on Wednesday.

“I don’t think the (refining) business is sustainable at these rates (refining margins).”

However, Chinese oil demand is likely to remain solid through the fourth quarter and into 2021 as its economy grows while the rest of the world is in negative territory, he added.

Among the uncertainties facing the oil market are rising Libyan output on the supply side and a second wave of global COVID-19 infections, especially in Europe, on the demand side, Al-Buainain said.

Complicating efforts by other OPEC members and allies to curb output, Libyan production is expected to rebound to 1 million bpd in the coming weeks.

Oil prices, meanwhile, fell over 4 percent on Wednesday as surging coronavirus infections in the US and Europe are leading to renewed lockdowns, fanning fears that the unsteady economic recovery will deteriorate.

“Crude oil is under pressure from the increase in COVID-19 cases, especially in Europe,” said Robert Yawger, director of energy futures at Mizuho in New York.

Brent futures fell $1.91, or 4.6 percent, to $39.29 a barrel, while US West Texas Intermediate crude fell $2.05, or 5.2 percent, to $37.52.

Earlier in the day Brent traded to its lowest since Oct. 2 and WTI its lowest since Oct. 5.

Futures pared losses somewhat after the US Energy Information Administration (EIA) said a bigger-than-expected 4.3 million barrels of crude oil was put into storage last week, but slightly less than industry data late Tuesday which showed a 4.6 million-barrel build.

However, crude production surged to its highest since July at 11.1 million barrels per day in a record weekly build of 1.2 million bpd, the data showed.

Gasoline demand has also been weak overall, down 10 percent from the four-week average a year ago. US consumption is recovering slowly, especially as millions of people restrict leisure travel with cases surging nationwide.