Dubai: Arabian Centres shares tumbled on the listing day on Wednesday as institutions resorted to selling on its listing day.
Arabian Centres’ 2.47 billion-riyal IPO was the second-biggest primary listing after National Commercial Bank’s $6 billion offering in 2014.
Arabian Centres shares reversed its early gains and tumbled 6.69 per cent to be at 24.26 Saudi riyals. The offering was priced at much lower end of the range at 26 riyals. About 275 million riyals worth of shares changed hands.
“If you recall the IPO was barely oversubscribed in the institutional tranche, which means some institutional investors might have got over allocation and the listing selling pressure might be coming from these investors offloading their extra holding of this stock,” Nishit Lakhotia, head of research at SICO Bank, told Gulf News.
Final allocations were approximately 94 per cent to institutional investors and around 6 per cent was allotted to individual investors. Overall, the Tadawul index, however, edged higher, extending gains for another session ahead of the official inclusion in the MSCI emerging market index.
The Tadawul index was 0.58 per cent higher to be at 8,659.35.
2.47bValue of Arabian Centres’ IPO (in Saudi riyals)
“There could be some strength until next week in Tadawul ahead of the inclusion and before the market shuts for an extended period on account of Eid. However, a major rally is unlikely given the escalated geo political tension in the region at present,” Lakhotia said. The Tadawul index has shaved off around 50 per cent of its gains, and is up 8 per cent since January 1.
In other stocks, Saudi Basic Industries Corp was 0.35 per cent higher at 113.20 riyals. Al Rajhi Bank was 0.57 per cent lower at 70.60 riyals.
The Dubai Financial Market general index closed 1.78 per cent higher at 2,584.35 helped by buying in Emaar shares.
0.58%Rise in the Tadawul index yesterday to close at 8,659.35
Emaar Properties closed 2.6 per cent higher at Dh4.34. Gulf Finance House closed 5.6 per cent higher at Dh0.904. Emaar Malls closed more than 2 per cent higher at Dh1.82. Dubai Islamic Bank closed 0.4 per cent higher at Dh4.95. Arabtec closed at Dh1.52, up 5.56 per cent.
The Abu Dhabi Securities Exchange general index closed 0.68 per cent lower at 4,750.01. Abu Dhabi Commercial Bank ended 0.68 per cent lower at Dh8.74.
First Abu Dhabi Bank ended 1.71 per cent lower at Dh13.82. The Muscat MSM 30 index closed 0.49 per cent higher at 3,861.43.