Saudi Arabia is still expected to chalk up the region's biggest ever listing when National Commercial Bank's SR22.5 billion ($6 billion) offering closes on November 2, bucking a broader market slowdown.

The initial public offering, the second-biggest globally this year after the $25 billion flotation of Alibaba Group, is happening at a time when listings in other parts of the world have been halted due to market volatility caused by concerns over the strength of global economic growth.

After Wednesday, the 11th day of the offer period which began on October 19, the retail part of the IPO was 50.3 per cent covered by around 757,000 investors, arranging banks said.

But subscriptions should pick up in the final days of the offer, due to close on Sunday, as Saudis are usually reluctant to commit their capital early in the period, analysts said.

NCB is offering 300 million shares to Saudi Arabian individuals and 200 million shares to the state-run Public Pension Agency, equivalent to a 15 per cent and 10 per cent stake respectively.

The price of shares, SR45 each, is also a considerable discount to their true value, analysts said, with a price to book value of two times, below the sector average of 2.2 times.

This is in line with other privatisations, such as the SR9.25 billion offering of Saudi Arabian Mining Co (Ma'aden) in 2008, which offer cheap shares to help the authorities spread the kingdom's vast wealth to citizens.

The pace of IPOs in the kingdom contrasts with the situation in Europe. Last week, Italian paper group Fedrigoni and British used car company BCA Marketplace both postponed listings.

Saudi Arabia's wider index has shown signs of the uncertainty gripping global markets, falling 12 per cent in the month to October 16, before recovering somewhat last week.

NCB's listing also attracted the ire of prominent clerics in the conservative kingdom, who argued investing in the bank was forbidden for Muslims as not all NCB's dealings were conducted according to sharia principles, forcing NCB to pledge it would convert to an Islamic bank in around five years.

AMPLE CASH

However, the Saudi IPO market is often seen as insulated from global sentiment, with significant local cash looking for domestic assets. This has allowed flotations to happen regularly, even at the height of the global financial crisis.

The fact only half the NCB offering has been taken up so far is more because Saudi investors, who have to hand over funds when ordering shares, don't like having their cash locked up for more time than is necessary, analysts said.

"Saudi investors took advantage of the rally earlier in the period, hence there was less appetite than expected," said John Sfakianakis, regional director for the Gulf at Ashmore Group.

"However, investors always submit their orders at the end of an IPO so while a 50 percent covered rate now might not look that rosy, there should be no concern about the offering not being fully covered by the close on Sunday."

NCB is the only unlisted lender of the kingdom's 12 banks, with assets worth SR438 billion at the end of September.

At the offer price, NCB will be the fourth largest stock on the Saudi exchange, and the second-biggest bank by market value. Al Rajhi is the current largest listed bank, with a market capitalisation of $28.59 billion.

HSBC Saudi Arabia and GIB Capital, the investment banking arm of Gulf International Bank, are arranging the IPO, with the final result expected some time next week. - Reuters