Saudi insurers IPOs oversubscribed

Initial public offerings of four Saudi insurers have been oversubscribed three days after they started, the lead manager said on Wednesday.

By the end of Tuesday, the IPOs of Saudi Arabian Cooperative Insurance (SAICO), Allied Cooperative Insurance Group (ACIG) and Al-Ahlia were 2.4, 1.4 and 1.6 times oversubscribed, respectively, National Commercial Bank (NCB) said.

The three firms are seeking to raise 40 million riyals ($10.7 million) each, or 40 percent of capital.

Al Ahli Takaful's 26.5 million riyals IPO, for 26.45 percent of its capital, was 2.8 times oversubscribed, NCB said in a statement.

The four firms were among seven Saudi insurance firms which launched initial public offerings on Saturday to raise a total of 354.4 million riyals.

Financial advisers and lead managers for the other three insurance firms' IPOs could not be reached.

The three firms are Sanad for Cooperative Insurance, Gulf Union Cooperative Insurance Co., and Saudi Indian Cooperative Insurance. They are offering 40 percent of their stakes.

Analysts expect the seven IPOs to be oversubscribed because of the strong growth potential in the insurance industry, the appetite for new share issues and the relatively cheap listing prices.

The government has given licences to 26 insurance firms and is considering applications by 10 others to try to open up the insurance sector in the world's top oil exporter.

Saudi Arabia is the largest economy in the Gulf Arab region, one of the world's most under-insured areas, partly due to the belief that insurance could indicate a lack of religious faith.

Standard & Poor's estimated last year that per capita premiums in the Gulf were around 2 percent of those in Europe.

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM