Dubai: National Commercial Bank (NCB), the largest bank in Saudi Arabia, plans to raise $6 billion (Dh22 billion or 22.5 billion Saudi riyals) through an IPO (Initial Public Offering), making it the second biggest share sale after Alibaba this year.
The sale will be the second-biggest of the year globally, trailing Chinese e-commerce business Alibaba $25 billion IPO last month and ahead of Japan Display’s $3.1 billion March IPO, according to data from Bloomberg. It will also be the largest in the Middle East, surpassing the $5 billion raised by Dubai’s DP World in 2007, according to the data.
“It is very positive for the market and for the banking sector and it would enhance transperency,” Rami Sidani, head of investments in the Middle East at Schroders, told Gulf News.
The company plans to raise cash by selling 500 million shares 45 riyals per share. The offer will open on October 19 and close on November 2.
NCB will sell 25 per cent of its share capital or 500 million shares, out of which 15 per cent will be allocated to retail investors in Saudi and the remaining 10 per cent to the Public Pension Agency.
In March, Saudi’s finance minister Ebrahim Al Assaf announced the decision to list the company.
The NCB made 2.425 billion riyals in the three months to June 30, compared with 1.99 billion riyals in the corresponding period of 2013.
Foreign money
“It is also very positive for the markets as it will enhance liquidity, and we would see more flows in the market. Once market capitalisation increases, and with foreign money coming in next year, there is a strong prospects of it to get included in the index either the MSCI or S&P in 2016,” Sidani said.
The kingdom plans to allow foreign investors to participate directly in the equity markets by the first half of next year.
The capital markets regulator has proposed an arrangement, where foreign investors can hold only 10 per cent of shares in companies on the country’s stock exchange.
The Tadawul index has gained 30.84 per cent on year to date basis.
