JEDDAH, 15 December 2004 — Saudia Dairy and Foodstuff Company (SADAFCO) plans to offer 30 percent of its shares to public that will be fully underwritten by National Commercial Bank (NCB).
The first family company in the Kingdom to go public and seek investors on the open market, the market reaction to its initial Public Offering (IPO) is being awaited with interest as a bellwether for future issues.
“Familiar to consumers across the Gulf, the IPO of shares is the logical next step for SADAFCO after it became a joint stock company in 2000 as part of a program to reinforce its position as a regional leader in the dairy and foodstuff market,” said SADAFCO Managing Director, Ahmed Mohammed Al-Marzouki.
The Saudi domestic economy is cash rich; new stocks floated on the market recently have been hugely oversubscribed as investors seek a sound home-grown berth for their cash.
Yet the number of IPO’s coming to market in the Kingdom has been very slow with only six new companies coming to the stock market in the last 8 years.
However, in the last two years, the acceleration in the stock market index has been very much driven by driven by huge liquidity in the country. “This has been not so much by repatriation of funds but by less capital flight,” said Dr. Nahed Taher, senior economist at NCB.
