$680 million IPO launched by Emaar Economic City
A $680 million initial public offering was recently launched by Emaar Economic City, which is currently making the single largest private investment ever in the oil-rich Kingdom.
The initial public offering of Emaar Economic City will stand as a test for investor appetite following since the kingdom’s stock market crashed this year, according to Reuters. The company has launched a $26.7 billion industrial and financial center on the Red Sea coast of Saudi Arabia.
Currently, the IPO is open only to Saudis; however, investors in the Gulf Arab region and in the emirate of Dubai are keeping close watch on the performance of the IPO as a sign of investor confidence. Dubai is the home market of major shareholder Emaar Properties.
The offering of a 255 million existing share IPO at 10 riyals ($2.67), or a 30 per cent stake, is the first such investment this year since the crash of the Kingdom’s stock market. Between February and May of the current year, Saudi Arabia’s bourse, the world’s largest, was halved.
Analysts maintain that as a result of government backing for the project and its high-profile investors, including Emaar, which is the United Arab Emirates’ largest listed company.
“The project has the right name and it has the right backing,” said Walid Shihabi of Dubai investment bank Shuaa Capital.
The Saudi market, however, still has a long way to recover from the downfall.