British pharmaceutical firm eyes dual listing on London, Tadawul

Cambridge-headquartered Atlantic Healthcare is planning a London listing. (Reuters)
Cambridge-headquartered Atlantic Healthcare is planning a London listing. (Reuters)
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Updated 28 May 2021

British pharmaceutical firm eyes dual listing on London, Tadawul

Cambridge-headquartered Atlantic Healthcare is planning a London listing. (Reuters)
  • Atlantic Healthcare has already begun a successful $50 million pre-IPO fundraising campaign

DUBAI: A British pharmaceutical company set to launch a primary initial public offering (IPO) on the London Stock Exchange later this year is aiming to follow up with a dual listing on the Saudi Stock Exchange (Tadawul) in 2022, its CEO told Arab News.

Cambridge-headquartered Atlantic Healthcare is a specialist pharmaceutical company that is working on developing drugs to treat inflammatory bowel disease and other rare gastrointestinal disorders. It currently has six promising clinical programs underway at various stages.

The company last year engaged the services of Saudi investment advisory firm BMG Financial Group. In late 2020, BMG gained Capital Market Authority approval for Atlantic Healthcare’s pre-IPO prospectus and has since been actively fundraising $50 million in the Kingdom.

“BMG developed interest across a broad range of institutions and family offices. We are now in due diligence with a number of parties,” Toby Wilson Waterworth, chief executive at Atlantic Healthcare, told Arab News, adding that while the fundraising has not yet closed and is still active, the $50 million target has already been “oversubscribed”.

Once the due diligence has been completed, the second phase will be a listing on the London Stock Exchange, and the third and final phase will be a secondary listing on Tadawul.

“We’re in the process of working to close the investment, and then the plan is to turn that into the IPO process. We’ve been speaking to a number of banks in London and in New York, and we’ve spoken to a number of banks in the Middle East,” Waterworth said.

“The plan to do the primary listing would be at the end of this year, maybe drifting into the beginning of 2022. And then, once we’ve done that, the plan would be to do the secondary listing,” he added.

Tadawul announced in September 2019 that it was to allow foreign companies to list on its exchange for the first time. If all goes to plan, Atlantic Healthcare could potentially be the first British company to dual list on Tadawul.

The success of Atlantic Healthcare’s IPO could also have wider implications. In the run-up to Saudi Aramco going public at the end of 2019 with its $25.6 billion IPO, there had been a long and competitive battle among global bourses to get the energy giant to launch a listing on a non-Saudi bourse, with London one of the most prominent potential partners.

Speaking at the Future Investment Initiative gathering in Riyadh in January, Crown Prince Mohammed bin Salman said Aramco could launch a second offering of shares in the near future. “This will yield a cash flow transferred to the Public Investment Fund (PIF) to be reinvested domestically and internationally for the benefit of Saudi citizens,” the crown prince said.

Yasir Al-Rumayyan, governor of the PIF and chairman of Aramco, said a few days earlier that the oil company could sell more “if market conditions are right.”

Waterworth believes that his company’s dual listing could set a precedent and give London a potential advantage in any future Aramco negotiations. “The London Stock Exchange is still keen to continue to build its international relationships. And it is keen to see the relationship with Tadawul develop,” Waterworth said.

Looking to the future, Waterworth believes that the success of the fundraising would value Atlantic Healthcare at around half a billion dollars and by the end of the decade, he is aiming to hit a revenue of around $2.5 billion per annum.

“We’ve got a vision for a highly profitable company. We are planning to go to market in the US and Europe and in the early part of the 2030s when we calculate internally that we have the potential to reach those sort of revenue numbers,” Waterworth said.

“At the moment, a top-four accounting firm is valuing the company at around $500 million dollars. In the pre-IPO, we are looking to raise against that valuation $50 million+. This will be a reference point going toward the full IPO,” he added.

As well as being a potentially lucrative financial destination, Waterworth believes that Saudi Arabia will also be a big market for Atlantic Healthcare’s products.


All-time high mortgage volumes boosting Saudi economy: KPMG

All-time high mortgage volumes boosting Saudi economy: KPMG
Updated 14 sec ago

All-time high mortgage volumes boosting Saudi economy: KPMG

All-time high mortgage volumes boosting Saudi economy: KPMG

RIYADH: A booming mortgage market has helped fuel economic growth in Saudi Arabia this year, according to financial analysts KPMG.

The firm’s ‘Future Finance’ report claimed businesses operating in the real estate sector are key figures among the Kingdom’s non-bank financial institutions (NBFIs), which are helping the economy recover after the pandemic. 

KPMG estimates the value of Saudi Arabia’s NBFIs — which include automotive, commercial equipment and other consumer financing firms —  at about SR54 billion ($14.5 billion).

This sector plays a pivotal role in lending to certain segments of borrowers within the Kingdom.

Khalil Ibrahim Al Sedais, office managing partner at KPMG in Saudi Arabia said growth momentum which began in the second half of 2020 carried through into the first six months of this year.

“It is especially noticeable in the mortgage industry, where volumes were all time high due to domestic demand for housing, low interest rate environment and government guarantee for the first house of a citizen,” he said. 

Al Sedais added that NBFIs are expected to continue growing thanks to developments in the Saudi financial services sector, including in anti-money laundering compliance, fintech advancement, cybersecurity, business continuity planning and digitalization.

Currently, more than 35 NBFIs are operating in Saudi Arabia. As at the end of the fiscal year 2020, the total paid up capital of these entities was SR14.2 billion ($3.8 billion).

Real estate companies stand at SR3.9 billion ($1 billion), with non-real estate companies at SR8.8 billion ($2.3 billion).

Saudi Real Estate Refinance Company (SRC), as the refinancing entity of the industry, comes in at SR1.5 billion ($403 million).

Industry-wide total assets were SR 53 billion ($14.2 billion) by end of fiscal year 2020, and there was an outstanding loan book, on and off-balance sheet, of approximately SR54 billion ($14.5 billion).

This included the real estate companies’ loan book of SR 23.5 billion.

There was on-balance sheet loan portfolio growth of 16 percent compared to 2019, consisting of SR3.97 billion, according to KPMG. 

Despite SAMA’s new regulations allowing deposit-taking by finance companies, NBFIs are highly dependent on borrowing and securitization as the main source for financing their lending activities. 

At the end of 2020, equity and liabilities totaled SR53 billion of which, liabilities accounted for 63 percent, while capital and reserves represented 27 percent and 10 percent, respectively.


Higher oil prices, widespread vaccine roll-out to drive Saudi Arabia’s economic rebound: S&P

Higher oil prices, widespread vaccine roll-out to drive Saudi Arabia’s economic rebound: S&P
Updated 28 September 2021

Higher oil prices, widespread vaccine roll-out to drive Saudi Arabia’s economic rebound: S&P

Higher oil prices, widespread vaccine roll-out to drive Saudi Arabia’s economic rebound: S&P
  • Growth is heavily observed in non-oil sectors, particularly in real estate where the government aims to drive national home ownership to 70 percent by 2030

DUBAI: Saudi Arabia’s economy will benefit from higher oil prices and its successful COVID-19 vaccine roll-out, ratings agency S&P Global has said as it affirmed the Kingdom’s stable outlook in its latest report. 

The semi-annual review from S&P affirmed the A-/Stable/A-2 sovereign rating of the Kingdom, attributing it to a positive post-pandemic performance as well as an improvement in oil sector dynamics. 

Growth is heavily observed in non-oil sectors, particularly in real estate where the government aims to drive national home ownership to 70 percent by 2030. 

Plastic and petrochemical exports also supported the Kingdom’s non-oil manufacturing, and consumer spending rose 3 percent in the first half of the year. 

The easing of tourism restrictions also supported other non-oil industries, including hotels and hospitality. 

There is also evidence of progress in the oil sector, which was heavily hit by the pandemic and the production cuts that came with it. Saudi Arabia’s GDP contracted by 4.1 percent last year, the biggest since 1987. 

But the S&P report said oil is getting back on track, particularly given the OPEC+ decision to restore and increase overall production by 400,000 barrels per day - 100,000 from Saudi Arabia. 

These indicators could drive economic growth from 2021 to 2024, the report said, especially given government efforts at fiscal control. 


Goldman cuts China growth forecasts as power cuts start to bite

Goldman cuts China growth forecasts as power cuts start to bite
Image: Shutterstock
Updated 28 September 2021

Goldman cuts China growth forecasts as power cuts start to bite

Goldman cuts China growth forecasts as power cuts start to bite
  • Nearly 60 percent of the Chinese economy is powered by coal, but supply has been disrupted by the pandemic
  • Goldman Sachs said Tuesday it expects growth to come in at 7.8 percent, down from 8.2 percent

Goldman Sachs Tuesday lowered its annual economic growth forecast for China as nationwide power cuts hit millions of homes and halted production at factories, including some supplying Apple and Tesla.

Goldman Sachs said Tuesday it expects growth to come in at 7.8 percent, down from 8.2 percent, citing power cuts that led heavy industries to cut output, leading to "significant downside pressures".


It is the second bank to downgrade forecasts in as many days.


At least 17 provinces and regions -- accounting for 66 percent of the country's gross domestic product -- have announced some form of power cuts in recent months, mainly targeting heavy industrial users, according to Bloomberg Intelligence.


Nearly 60 percent of the Chinese economy is powered by coal, but supply has been disrupted by the pandemic, put under pressure by tough emissions targets and squeezed by a drop in coal imports amid a trade tiff with Australia.


Earlier this month, coal prices hit a record high, with restrictions imposed on businesses and homes amid the supply crunch.


Still, China's power demand in the first half of the year exceeded pre-pandemic levels, according to the National Energy Administration.



Analysts at Nomura said Monday a surging number of factories had been forced to cease operations due to either government mandates to meet carbon targets or surging prices and coal shortages.


It cut its annual GDP growth forecast to 7.7 percent.

Footage in local media Beijing News showed cars travelling on a busy highway in the city of Shenyang in complete darkness without traffic lights or street lamps.


"Power cuts eight times a day, four days in a row... I'm speechless," wrote one frustrated user from Liaoning.


Another complained that malls were shutting early and a convenience store was using candlelight.
"It's like living in North Korea," they wrote.

Apple supplier Unimicron Technology said factories in two regions were told to stop production from midday Sunday through Thursday, in filings with the Taiwan stock exchange on Monday.


Dozens of other companies, including a parts supplier to carmaker Tesla, were told to halt production this week, according to stock exchange filings.


The northeastern rust belt, with thousands of power-hungry cement kilns and steel smelters, has been among the worst affected.


A factory in northeast Liaoning had to rush 23 workers to hospital due to carbon monoxide poisoning after ventilators suddenly stopped working during a blackout, state broadcaster CCTV reported.

 


Saudi Arabia’s Knowledge Economic City gets new acting CEO

Saudi Arabia’s Knowledge Economic City gets new acting CEO
Updated 28 September 2021

Saudi Arabia’s Knowledge Economic City gets new acting CEO

Saudi Arabia’s Knowledge Economic City gets new acting CEO
  • Almubarak is KEC's current chief investment officer, and he is replacing Sami Almakhdoub

Knowledge Economic City (KEC), a special zone established during the time of late Saudi King Abdullah, has appointed Mohammad Abdulhameed Almubarak as acting chief executive officer from Oct. 1.

Almubarak is KEC's current chief investment officer, and he is replacing Sami Almakhdoub, whose contract expires on Sept. 30, 2021, the company said in a stock exchange filing. 

The new acting CEO holds extensive experience in real estate investment and development areas, and has worked with Riyad Capital and the Capital Market Authority (CMA). 

He has a masters in finance from the University of Cambridge, and a bachelor of science in finance from King Faisal University.

In April, KEC agreed to borrow SR782 million ($209 million) from the Saudi Tourism Development Fund and Riyadh Bank for the development of the Knowledge City Hub project in Madinah.


European shares drop to one-week lows on tech slide, China woes

European shares drop to one-week lows on tech slide, China woes
Image: Shutterstock
Updated 28 September 2021

European shares drop to one-week lows on tech slide, China woes

European shares drop to one-week lows on tech slide, China woes
  • The pan-European STOXX 600 index was down 1.3 percent
  • Data showed profit growth at China's industrial firms slowed for a sixth month in August

European stocks sank to their lowest in a week on Tuesday as a surge in government bond yields knocked high-growth technology shares, with fresh signs of a slowdown in China's economy weighing on investor sentiment.


The pan-European STOXX 600 index was down 1.3 percent, falling for a third session as a jump in U.S. Treasury yields signalled that investors were bracing for higher rates and the risk of persistent inflation.

Global shares were also down for a third successive day, while bond yields on both sides of the Atlantic soared on anxiety over when central banks might raise interest rates.


MSCI's All Country World Index, which tracks shares across 49 countries, was down 0.3 percent on the day after the start of trading in Europe.

Britain's FTSE 100 index fell 0.5 percent, while Germany's DAX fell 0.8 percent. France's CAC 40 fell 1.1 percent and Italy's FTSE MIB index slipped 0.6 percent.


Technology stocks fell 3.7 percent to hit a one-month low after their Wall Street peers tumbled overnight. They are particularly sensitive to rising interest rate expectations as their value rests heavily on future earnings, which are discounted more deeply when rates go up.


Meanwhile, data showed profit growth at China's industrial firms slowed for a sixth month in August, with an unfolding power crisis becoming a growing threat to output and profits.


"The pandemic situation remains unresolved. The Chinese economy is slowing and authorities have yet to stimulate forcefully. The Fed is preparing to normalize policy. And the debt ceiling showdown is ongoing," analysts at BCA Research wrote in a note.


"Heightened uncertainty combined with elevated speculation suggests that the near-term path will be bumpy."

While the benchmark STOXX 600 is on course to extend its quarterly winning run, a volatile September took some shine off its third-quarter gains as investors priced in risks of easing global growth momentum and tighter monetary policies.


However, a rally in Brent crude futures above $80 per barrel continued to support energy stocks, with the oil and gas index rising 0.9 percent to fresh highs since February 2020.