Popular capitalism takes root in Saudi IPO boom

Popular capitalism is taking root in the Arabian Gulf with the boom in stock market flotations, led by record offerings in Saudi Arabia, according to financial industry observers.

The most active initial public offering (IPO) market and largest economy in the Middle East - comes under the spotlight next week at the 2nd Saudi IPO Summit from 10-14 November 2007 at the Four Seasons Hotel, Riyadh, under the patronage of HH Prince Salman Ibn Abdul Aziz Al Saud, Governor of Riyadh.

"Increasingly Saudi Arabian companies are going public to raise capital and benefit from the confidence of local investors," said Deep Marwaha, senior conference manager for IIR Middle East, organisers of the Saudi IPO Summit. "Popular capitalism is being created here and also bringing international capital into local markets on a scale never seen before. The Saudi IPO Summit provides a credible platform to support this accelerating trend."

He added:

"Strong oil revenues and high liquidity have ensured strong GDP growth and this has culminated in a healthy Saudi appetite for multiple flotations. And there are still several more large and small IPOs in the pipeline."

According to Ernst & Young, 20 Middle Eastern companies raised a total of $3.9bn in IPOs in the second quarter of 2007, of which Saudi featured two of the three largest offerings in the region worth a combined total of $2.34bn. Currently earning a fivefold return, the Saudi IPO market is expected to continue to grow as the kingdom's financial sector makes progress in liberalisation, regulations and standards.

The 2nd Saudi IPO Summit features an impressive line-up of industry experts including investors, regulators and executives from companies who have successfully made the transition from private to public. Giving the keynote at this year's event will be Mutlaq Hamad Al Morished, Chairman, of Saudi Kayan Petrochemical Company, who will deliver a case study of Kayan's successful $1.8bn IPO.

Also speaking at the event is Abdullah Al Fallaj, VP Finance, of publically quoted Ma'aden (Saudi Mining Company) who is planning to raise an additional $2.5bn through an IPO. With its vast mineral wealth, mining is seen as the next investment boom in the Kingdom after, oil and real estate.

The summit will also address the fundamental issues affecting IPOs, such as reasons for launching, essential management restructuring, conversion of family businesses and exit strategies.

There will also be a post-Summit Islamic Debt Capital Markets' Boot Camp on Sukuk securitisation as an alternative to raising finance with conventional debt instruments and public offerings.

The 2nd Saudi IPO Summit has received solid industry support with Samba as headline sponsor. Principal sponsor is NCB Capital, primary sponsor is Al Bilad Bank, lead sponsor is Calyon. Supporting partner is Jadwa Investment. Gold sponsor is NAEEM Investment Company; silver sponsors are the Saudi Investment Bank, Swicorp, Oracle, TNI and TradeNet.