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The company set the IPO price at 105 riyals after attracting 458 billion riyals ($122b) of orders from investors. Image Credit: Reuters

Saudi Tadawul Group surged on its trading debut after the stock exchange raised $1 billion, marking the biggest exchange IPO since Euronext went public in 2014.

The shares rose as much as 22 per cent on Wednesday on bets that buoyant Middle East stock markets will attract more listings from private companies and cash from investors around the world.

The pipeline for IPOs in the kingdom is “deeper than ever,” CEO Khalid Al Hussan said in an interview with Bloomberg Television. “It will be even better next year,” he said, adding that technology, health care and education companies are among the newcomers to the market.

Tadawul shares traded up 12 per cent at 117 riyals by 2.12pm in Riyadh. The company set the IPO price at 105 riyals, the top of an indicative range, after attracting 458 billion riyals ($122 billion) of orders from investors.

The IPO, the kingdom’s second-biggest this year after the $1.2 billion listing of ACWA Power International in October, comes as countries in the Middle East step up efforts to sell shares in private companies and boost liquidity on their stock markets.

The Saudi benchmark index had been on a tear this year, extending its 2021 gains to as much as 37 per cent in October. But recently it has pared its advance as the emergence of the COVID-19 Omicron variant tested global investor sentiment.

Across the world, first-time share sales have boomed thanks to ample liquidity and buoyant stock markets, raising a record $616 billion so far this year, though cracks have begun to emerge in recent months as inflationary pressures weigh on equities.

Tadawul’s IPO has been planned since at least 2016, when it hired HSBC Holdings Plc as an adviser. It put the offering on hold while the exchange went through a process of increasing access for foreign investors, and then staged the listing of Aramco in 2019, the world’s largest ever.

The process was resumed earlier this year and Tadawul replaced HSBC with Citigroup Inc., JPMorgan Chase & Co., and SNB Capital as financial advisers and global coordinators.