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Shares in biggest Saudi bank jump 10pc on listing

DUBAI, November 12, 2014

Shares in Saudi Arabia's biggest lender, National Commercial Bank, jumped their daily 10 per cent limit upon listing on Wednesday after a $6 billion IPO, the largest ever in the Arab world and the second-biggest globally this year.

Completing the initial public offer last week, state-owned NCB said the $3.6 billion portion for retail investors was 23 times subscribed, with a total of 1.25 million subscribers - roughly one in every 16 Saudi citizens - taking part.

Demand for the IPO, at a fixed price of 45 riyals per share, was huge partly because Saudi authorities tend to price initial offers of equity cheaply, using them to spread corporate wealth among citizens.

Institutional investors were not allowed to take part in the offer and will have to buy the stock, which is certain to become a staple in every Saudi Arabia-focused portfolio, on the secondary market.

Bahrain-based Securities & Investment Co rated NCB a "high conviction buy" with a target price of SR72, citing its outlook for strong balance sheet growth and sustainable margins. The stock opened on Wednesday at SR49.5, with a massive amount of unfilled buy orders that came close to equalling the bourse's total trading volume on a normal day.

NCB's surge underscores a generally bullish mood on Saudi Arabia's stock market, which is preparing for inflows of fresh money early next year, when regulators plan to allow foreigners to buy local stocks directly for the first time.  - Reuters




Tags: Saudi | Shares | NCB | listing |

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