Business | Banking
Saudi Arabia's Inma Bank launches $2.8b IPO
Middle East offerings have so far raised more than $4b this year
- By Simeon Kerr, Financial Times
- Published: 20:40 April 7, 2008
Dubai: Al Inma Bank launch-ed a $2.8 billion initial public offering (IPO)on Monday, the largest Saudi flotation and the latest regional IPO spurred by surging oil prices.
The government-backed, Sharia-compliant bank will sell 70 per cent of its equity in a 10-day offering open only to Saudi nationals. It will be the Gulf's second-largest flotation, trailing last year's IPO of DP World, Dubai's ports operator.
Al Inma will become one of the world's most powerful Islamic institutions, capitalised at the same level as Saudi's largest Islamic bank, Al Rajhi.
The start-up has revealed little about its strategy, other than to say it will focus on retail, commercial, treasury and investment banking operations.
It is the latest of a series of Middle East offerings as the Gulf shrugs off global economic uncertainty and the credit crisis, which have caused new issues to dry up in the US and Europe.
Surge
The Middle East has so far this year raised more than $4 billion, four times as much as the same period last year, according to data from Zawya.com, a regional business information provider.
While the Saudi Tadawul stock market has fallen 17 per cent this year, a stream of companies has come to market in the oil-rich kingdom, thanks to a combination of economic reform and oil-related liquidity that has seen deposits in the domestic banking system reach a record $200 billion.
"Saudi Arabia's immature capital market is coming of age," said Mohammad Omran, of the Gulf Centre for Financial Services, a financial consultancy.
Omran believes as many as 8 to 10 million Saudis, about half the population, could take part in the IPO, thanks to strong demand for Islamic financial services in the conservative Muslim country and a belief that the bank's government backing will help the new institution take off. The world's top Islamic banks are seeing 27 per cent annual asset growth.
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