Saud investors started on Sunday participation in the biggest initial public offering (IPO) locally and regionally.
The National Commercial Bank (NCB), the Kingdom’s biggest bank by assets, launched yesterday its public subscription, through which 500 million shares, or 25% of capital reaching 2 billion shares, were offered at SAR 45 each.
Economist Mohammed Alsuwayed told Mubasher that the offering is likely to be 100% covered, indicating that the issue price of SAR 45 per share is below forecasts.
Alsuwayed added that the stock’s price target will range between SAR 50 and SAR 60 after listing.
The subscription impact on the market performance will be temporary, as it is supposed that SAR 22.5 billion ($6 billion) will be withdrawn from the liquidity during the subscription period. However, when the offering ends, the market will resume its normal performance, he noted.
Alsuwayed also indicated that the IPO will boost the market in the next period, expecting the index to reach 11000 or 12000 pts.
The NCB will take the second rank after Al-Rajhi Bank in terms of its impact on the general index.
Alsuwayed said Sunday’s remarkable trading on SABIC was due to oil prices, adding that the Kingdom and some OPEC state members continued to increase their sales quantities over the past weeks regardless of the decline in oil prices.
SABIC reached on Sunday its highest in three years.
He expected oil prices to decline to nearly $70 per barrel.