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Mon 12 Nov 2007 01:46 AM

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Saudi IPOs to hit $8bn

Up to 40 firms will sell shares to public in 2008 in offerings worth twice this year's total.

Some 40 firms will sell shares to the public in Saudi Arabia in 2008, in offerings worth up to $8 billion, or twice this year's total, the investment banking arm of state-owned National Commercial Bank (NCB) said yesterday.

"We may see 30 to 40 companies," Hasan Al Jabri, head of investment at NCB Capital, told a conference in Riyadh.

"I think liquidity in the market is quite strong ... The 40 companies who have announced that they would like to go for an IPO next year are talking about less than $8 billion."

Al Jabri said there had been about 25 initial public offerings in Saudi Arabia in 2007, which raised a total of around $4 billion. NCB Capital was mandated lead manager and underwriter for seven IPOs in 2007.

Al Jabri told Reuters he was including in next year's IPOs the $10-billion PetroRabigh refinery venture between Saudi Aramco and Japan's Sumitomo Chemicals and the start-up Inmaa Bank.

The Saudi stock market authority said this month PetroRabigh's IPO would run from January 5 to January 12 and would involve the sale of a 25% stake in the company.

No announcement has been made regarding Inmaa Bank, although the government had said it could hold its IPO for 70% of its capital this year.

"Our expectation is that it will be a par issue (10 riyals per share)," Jabri said of Inmaa Bank.

The largest Middle East IPO to date was the 2003 sale of $2.72 billion of stock by Saudi Telecom but IPOs that once caused scuffles among potential retail investors have become less appealing since Gulf stock markets crashed in 2006.

Regulators, especially in Saudi Arabia and the United Arab Emirates, are now working on reforms to draw institutional investors and make share sales more attractive for companies.

Asked about concern for demand, Jabri said: "These firms are fantastic. With such quality firms you will see a lot of appetite from the market ... Forty seems a challenging number, but it's achievable."

NCB is the Saudi Arabia's largest bank by assets.