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Tue 5 May 2015 12:52 PM

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Saudi hardware retailer SACO's IPO meets strong demand

Flotation has been covered 620%, raised around $134m

Saudi hardware retailer SACO's IPO meets strong demand

The retail portion of the initial public offer of Saudi Company for Tools and Hardware (SACO) has been covered 620 percent, its financial adviser said.

SACO, a popular supplier of building tools and mechanical equipment in the kingdom, offered 2.88 million shares to individual investors after selling 4.32 million shares last month to institutions. In total, its flotation raised around 504 million riyals ($134.4 million).

Earlier this week, shares in Saudi Arabia's Middle East Paper Co started trading after the company's own IPO, surging their daily 10 percent limit for two sessions in a row.

In an attempt to reduce the volatility around IPOs, Saudi Arabia's market regulator is bolstering the funds sector and encouraging the creation of institutional funds focused on the primary share market.