JEDDAH, 19 April 2006 — As many as 1.6 million people bought the shares of Saudi Research & Marketing Group (SRMG) during its initial public offering (IPO) which ended on Monday, Samba Financial Group, which managed the IPO, announced yesterday. The IPO was oversubscribed nearly four times.
“There was big rush by investors to subscribe to SRMG shares in the last days of the IPO despite an announcement that all offered shares have been subscribed in the first week,” said Eissa Al-Eissa, managing director and chief executive of Samba.
“This huge demand reflects the confidence of investors in the company,” the Samba chief said. He said the IPO was carried out smoothly and most investors used electronic means to complete subscription procedures.
“About 47 percent of operations were carried out using electronic means. This is a record,” he pointed out. There was a 10 percent increase in the number of women subscribers compared to previous IPOs. Young Saudis below the age of 25 represented 22 percent, Al-Eissa said, giving a breakup of investors. He estimated the number of individual subscribers at 45 percent of the total, attributing this achievement to the company’s efforts to enhance investment awareness of the public.
Samba announced that allocation of shares to subscribers would be finalized by April 23 when the banks involved in the IPO would start refunding excess amounts to investors. SRMG had offered 24 million shares for SR46 each with a total value of SR1.104 billion in the IPO, which was launched on April 8.
A number of Saudis who purchased SRMG shares expressed happiness for having an opportunity to become shareholders of a successful company. Speaking to Arab News, they expressed their optimism that prices of SRMG shares would go up several times when exchanged on the Saudi bourse.
Nafeesa Al-Shibani, a senior educationalist, said she was attracted by the company’s international reputation and its financial results showing record profits in 2005. “I knew that buying shares of this company that includes outstanding publications in the Middle East such as Asharq Al-Awsat, Sayidaty and Arab News would be a win-win deal,” she said.
Dr. Ahmad F., a King Abdul Aziz University professor, was also impressed by the company’s consistent record of successes as a leading international media organization.
“I am quite confident that subscribers would make a profit of between 300 and 400 percent on their initial investment,” he added.
As a bank employee, Ghassan Majdali was monitoring the tremendous demand for SRMG shares especially in view of the fact of it being the largest media company in the Middle East whose publications are read by an estimated 180 million readers worldwide. “SRMG is the leading media organization and it’s going to be setting the standards that other establishments are measured by,” he pointed out.
Al-Amin Mohammad Abdul Rahman, a computer engineer, also believed that the value of SRMG shares would go up four times when traded on the stock market.
Fadel Al-Fadel, a subscriber from Madinah, said he considered the purchase of SRMG shares as a new line of investment.
Faisal Hadda, a human resources expert, said he had no hesitation when he decided to purchase the company’s shares as he believed that SRMG would be profitable. “It has been in the market for more than 30 years. It has a strong image and brand name.”
— Additional input from Ali Al-Zahrani
