- Title: SAUDI ARABIA-NCB DEBUT Shares in biggest Saudi bank jump 10 pct on listing
- Date: 12th November 2014
- Summary: RIYADH, SAUDI ARABIA (NOVEMBER 12, 2014) (REUTERS) ***WARNING CONTAINS FLASH PHOTOGRAPHY*** SCREEN SHOWING SHARES OF SAUDI COMPANIES AT SAUDI STOCK EXCHANGE HEADQUARTERS PEOPLE SEATED AT EVENT DIRECTOR-GENERAL OF MONETARY AND FINANCIAL FUND AT TADAWUL STOCK MARKET, WALID AL-BAWARDI, WALKING TO PODIUM ATTENDANCE (SOUNDBITE) (Arabic) DIRECTOR-GENERAL OF MONETARY AND FINANCIAL FUND AT TADAWUL STOCK MARKET, WALID AL-BAWARDI, SAYING: "Today's stock listing will surely add to both, the sector and the market, more liquidity. This will, in return, increase the share of the banking sector in both trading and the market value. According to this, it is expected that the market value in the Saudi market will increase by more than ninety billion riyals after the listing of National Commercial Bank shares in the market." ATTENDANCE CLAPPING SCREEN SHOWING SHARES / STOCK MARKET FIGURES ATTENDANCE / CHAIRMAN OF NATIONAL COMMERCIAL BANK, MANSOUR AL-MAIMAN, WALKING TO PODIUM REPORTER READING NOTES (SOUNDBITE) (Arabic) CHAIRMAN OF NATIONAL COMMERCIAL BANK, MANSOUR AL-MAIMAN, SAYING: "Listing the bank shares will also help increase the depth of the Saudi stock market and will allow Saudi nationals to share ownership of a prestigious financial institution with a solid financial position that has proven over decades its ability to generate profit and achieve sustainable growth." ATTENDANCE CLAPPING VARIOUS OF AL-MAIMAN AND AL-BAWARDI SIGNING SYMBOLIC CERTIFICATE LISTING NATIONAL COMMERCIAL BANK IN SAUDI MARKET AL-MAIMAN AND AL-BAWARDI SHAKING HANDS CERTIFICATE OF LISTING NATIONAL COMMERCIAL BANK IN SAUDI MARKET SCREEN SHOWING SAUDI STOCK EXCHANGE (TADAWUL) AL-MAIMAN AND AL-BAWARDI SEATED SCREEN SHOWING ACTUAL LISTING OF NCB IN SAUDI MARKET WIDE OF CEREMONY HALL VARIOUS OF SCREEN SHOWING SHARES SCREEN, ATTENDANCE AT END OF CEREMONY
- Embargoed: 27th November 2014 12:00
- Keywords:
- Location: Saudi Arabia
- Country: Saudi Arabia
- Topics: General
- Reuters ID: LVA27Q6SP8LJWTF3QIKT6HGEVYYN
- Story Text: Shares in Saudi Arabia's biggest lender, National Commercial Bank (NCB), jumped their daily 10 percent limit upon listing on Wednesday (November 12) after a US6 billion dollar IPO, the largest ever in the Arab world and the second-biggest globally this year.
Completing the initial public offer last week, state-owned NCB said the US3.6 billion dollar portion for retail investors was 23 times subscribed, with a total of 1.25 million subscribers - roughly one in every 16 Saudi citizens - taking part.
Director-General of the Monetary and Financial fund at Tadawul stock market Walid al-Bawardi, spoke of the benefits of the listing at the Saudi Stock Exchange Headquarters in Riyadh.
"Today's stock listing will surely add to both, the sector and the market, more liquidity. This will, in return, increase the share of the banking sector in both trading and the market value. According to this, it is expected that the market value in the Saudi market will increase by more than ninety billion riyals after the listing of National Commercial Bank shares in the market," said al-Bawardi.
Demand for the IPO, at a fixed price of 45 Saudi riyals per share (US12 dollars), was huge partly because Saudi authorities tend to price initial offers of equity cheaply, using them to spread corporate wealth among citizens.
Institutional investors were not allowed to take part in the offer and will have to buy the stock, which looks certain to become a staple in most Saudi Arabia-focused portfolios, on the secondary market.
The stock opened on Wednesday at 49.5 Saudi riyals (US13 dollars), with a massive amount of unfilled buy orders that came close to equalling the bourse's total trading volume on a normal day.
Bahrain-based Securities & Investment Co rated NCB a "high conviction buy" with a target price of 72 Saudi riyals (US72 dollars), citing its outlook for strong balance sheet growth and sustainable margins.
Based on listed Saudi banks' median price to 2013 earnings ratio, NCB would be worth about 76 Saudi riyals (US20 dollars).
At Wednesday's traded price, NCB added 99 billion Saudi riyals (US26.4 billion dollars) to Saudi Arabia's pre-listing stock market capitalisation of US518 billion dollars.
Speaking at the event, Chairman of the National Commercial Bank, Mansour al-Maiman, said the listing will provide Saudi citizens with the opportunity to own shares.
"Listing the bank shares will also help increase the depth of the Saudi stock market and will allow Saudi nationals to share ownership of a prestigious financial institution with a solid financial position that has proven over decades its ability to generate profit and achieve sustainable growth," said al-Maiman.
NCB's surge underscores a generally positive mood on Saudi Arabia's stock market, which is preparing for inflows of fresh money early next year, when regulators plan to allow foreigners to buy local stocks directly for the first time.
Twenty-five percent of the bank's capital was sold in the IPO, with 60 percent of the offer going to retail investors and the remainder allocated to the Public Pension Agency.
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