Goldman Sachs to test Saudi rules to limit stock swings post IPO
US bank is acting as stabilisation agent for mall owner Arabian Centres
DUBAI: Goldman Sachs Group Inc. will test out Saudi Arabia’s new market rules that aim to limit price swings after share sales.
The US bank is acting as stabilisation agent for mall owner Arabian Centres, which will start trading this week after completing the kingdom’s biggest initial public offering since 2015. Arabian Centres raised about 2.47 billion riyals ($659 million, Dh2.42 billion) after pricing shares at the bottom end of the range.
Goldman Sachs may sell additional shares or take other actions to support the Arabian Centres shares once they list. The mall owner allocated an extra 12.8 million shares, or 13.5 per cent of the offering, to the bank, according to a statement from the Capital Market Authority.
Saudi Arabia’s market regulator approved the stabilisation rules last year and Arabian Centres is one of the first companies to use them.
Market Volatility
Arabian Centres is set to debut amid a bout of volatility in the Gulf as geopolitical tensions spill over into equity markets. A metric for short-term swings on the main Saudi index jumped last week to the highest level since October.
Finablr Plc slumped 10 per cent in its London trading debut last week after the UAE-based financial-services firm slashed its IPO price on low investor demand. The shares are 2.3 per cent lower than their trading debut.