JEDDAH, 2 November 2006 — According to the Capital Market Authority (CMA), the Red Sea Housing Services — a world leader in manufactured housing and the largest production facility in the Middle East — will officially start trading on the Tadawul from Saturday.
As per the CMA’s decision, trading will commence from 4 p.m. to 6.30 p.m. in a separate session for three days only, under code 4230 with orders being accepted from as early as 3.45p.m. Trades may be executed using ATM, the Internet or in-person methods. Upon its IPO release two-months-ago, the company was a target of controversy as investors and economic experts alike criticized it for being overpriced at SR58 per share.
The launch is set to coincide with the flotation of the Initial Public Offering (IPO) of Al-Babtain Power and the Telecommunication Company that will offer market capital equal to 30 percent of the company amounting to SR324 million or 8.1 million shares. Subscription will be open from Nov. 4 to 13 with HSBC and SABB being appointed the financial managers and underwriters of the offering.
Upon Al-Babtain’s decision, Ioannis Karapatakis, managing director of Global Investment Bank Advisory at HSBC Ltd., said, “The performance of Al-Babtain is impressive, and the company is operating in a sector where there are clearly enormous opportunity for growth. This IPO is indeed another milestone for HSBC and SABB we’re honored to serve as the lead managers and sole advisors.”
Meanwhile rising apprehension among investors is dredging up past memories of the last two IPO listings, YANSAB and Emaar Properties, which saw massive floods of trading orders resulting in a disappointing stock price, a backlog of the system and the burst of many hopes and dreams.
“I think it is a mistake on the CMA’s part for making the listing of Red Sea Housing and the IPO of Al-Babtain Power on the same day. I am waiting to see what is next basically and what new chaos is to come from the stock market,” Areef Mansouri, a Saudi investor told Arab News.
On the other hand, analysts are forecasting a different outcome. “The market capital of Red Sea Housing and that of Al-Babtain, as well, are small resulting in little or no impact to the Tadawul system and in my opinion, there shouldn’t be any confusion at all,” said Mohammed Shumambri, a financial analyst and owner of the Shumambri Investment Company in Jeddah.
Founded in 1967 by Abdullah Dabbagh in Jeddah, Red Sea Housing has completed projects in engineering, construction, oil, gas, and mining services with well-known clients such as Boeing, the Saudi Arabian Bechtel Company, and Saudi Aramco. The company will proudly bring the number of listed companies to 83 for the Saudi Tadawul All-Share Index (TASI).
