JEDDAH, 19 July 2006 — Despite announcements of half-yearly results by some blue chip companies, the Saudi stock market dropped yesterday after rising 8.66 percent on Monday. The Tadawul All-Share Index fell 155.13 points or 1.37 percent to 11,192.36.
Only the Services and Electricity indexes were higher while all other indexes declined yesterday.
The stock market turnover, however, increased to SR25 billion as shares of 31 companies rose yesterday.
In the Banking sector, shares of Saudi Hollandi Bank and Samba Financial Group were in the positive territory. Shares of all other banks edged lower yesterday.
The Industrial index was down 602.29 points at 23,931.13 as shares of Saudi Basic Industries Corp. (SABIC) plunged 4.03 percent to SR148.75. Etihad Etisalat shares also fell 3.06 percent to SR71.25 despite its announcement of SR154 million net profit for the second quarter of this year.
Meanwhile, Emaar Economic City (EEC), a consortium headed by Dubai-based Emaar Properties and a number of investors from Saudi Arabia, has unveiled its prospectus in advance of the initial public offering (IPO) to raise SR2.55 billion ($679.9 million).
The IPO of 255 million shares at a nominal value of SR10 ($2.66) each aims to raise 30 percent of EEC’s total share capital of SR8.50 million ($2.27 billion). Approved by the Saudi Capital Market Authority (CMA), the IPO will take place July 22 to Aug. 2.
According to the prospectus, the EEC will use the net proceeds from the offering to finance its real estate development operations and to pay land dues.
The IPO is fully underwritten with SABB acting as lead underwriters and lead manager and Riyad Bank and the National Commercial Bank acting as sub-underwriters. HSBC is also the exclusive financial adviser on the IPO.
KPMG Al-Fozan & Bannaga are the registered auditors and reporting accountants while Baker & McKenzie are the legal advisers.
Approved by the Ministry of Commerce & Industry, EEC is developing the single largest private sector initiative in Saudi Arabia - the SR100 billion ($26.6 billion) King Abdullah Economic City (KAEC). The Saudi Arabian General Investment Authority (SAGIA), the body responsible for inward investments to the Kingdom, is the prime facilitator of KAEC.
“A six-zone development, KAEC ushers in a new era of prosperity to the Kingdom,” said EEC Chairman Mohamed Ali Alabbar. “By integrating a world-class seaport, industrial district, financial island, educational zone, resorts and residential areas, KAEC perfectly complements the Kingdom’s on-going growth thrust. These components are all key economic sectors that will catalyze foreign investment inflow and boost commerce and industry.”
According to initial forecasts, KAEC has the potential to generate some 500,000 jobs.
“KAEC will be a world class location to work and live, and a shining example for Saudi Arabia’s transformation into a global economic powerhouse. It will further consolidate the Kingdom’s position as the Middle East’s largest economy,” said Alabbar.
Completion of the overall project will be done in stages with the first batch of businesses and residents expected to be moving into the city in a period of 30 to 36 months.
