What are the expectations for the momentum of initial offerings in the Saudi market?

In an interview with Al-Arabiya, CEO of Mekayal Financial Technologies Company, Hisham Abu Jameh, expected that there will be no significant momentum in the IPO market in the Saudi market until next October.

Abu Jameh said that with the start of the holiday season, it is unlikely that we will witness a great momentum for offerings until the end of the holiday season, and we have witnessed postponement and cancellation of some IPOs.

He explained that the financial market at the present time does not help, adding: “Liquidity is good, between 5-6 billion riyals, but it trades in shares of companies that are currently available, and that part of the liquidity is directed to new companies in light of market conditions, it will face difficulty.”

He added, “We find there is a great demand for sukuk and debt instruments due to the good returns.”

And that setting the subscription price of the “First Mills” company at 60 riyals per share, compared to its announced profits for the first 9 months of 2022, amounting to 198 million pounds, which is equivalent to the profits of 2021, is very attractive for subscription.

He stated that the company is enjoying strong growth in terms of profits, adding: “The company was purchased more than two years ago at a value of 540 million riyals, and today only about 30% is valued at about one billion riyals.”

The Saudi Al-Ahly Financial Company, in its capacity as the underwriting manager, financial advisor, director of the institutional subscription register and underwriter in the initial public offering of the “First Mills” company, announced the completion of the process of building the order book for the segment of the participating classes in the company’s shares, with a coverage rate of 68.9 times of the total shares offered.

The company set the final offering price at 60 riyals per share, which means that the market value of the company will reach 3.33 billion riyals ($888 million) upon listing. The value of subscription requests received during the book-building process amounted to 68.818 billion riyals ($18.351 billion).

With regard to the “Jamjoom Pharma” company, Abu Jamee said, “We believe that there is an exaggeration in the share price, and we are not optimistic about the occurrence of strong rises in the share in the first days of its trading in the market with the start of the holiday season.”

It is expected that the stock will be traded according to the new system before the end of next week.

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