Stock market trends vital to successful listing

The conference, which is due to take place on 19-22 November at the Al Faisaliah Hotel in Riyadh, will debate the whole spectrum of issues concerning IPOs with a special panel discussion on how various bourses operate and the comparative merits of listing on different exchanges.

The event, co-organised by the Riyadh Chamber of Commerce & Industry, is aiming to stabilise market performance and boost overall investor confidence after a volatile year of peaks and troughs on the Tadawul All Shares Index (TASI). Share prices now seem to have leveled-off and at the closing bell on 10th October, the TASI stood at 11,020 points, 10 per cent up on the year's low but still more than 50 per cent off February's high of 20,634.

Despite less than 90 companies being listed on the TASI, ironic given the phenomenal amount of funds seeking investment opportunities, private companies are stalling on planned IPOs due to the erratic behaviour of the Saudi bourse and low investor confidence. The paradox is that strong underlying economic indicators such as, 6.5 per cent economic growth, excess liquidity, a current account surplus of US$ 87 billion and positive corporate results should support a 'bull run' instead of the bearish attitude apparent. Crucially with no historical records, the TASI's performance as well as other regional bourses, is largely built on sentiment as opposed to proven pricing techniques and evaluating market trends.

Graham Dallas, Head of North America, Europe & MENA for the London Stock Exchange, commented, "To achieve sustainable growth and provide stability, IPOs must be strategically planned and disclosures shared with potential investors. Public and private companies, investors, brokers and government regulators, can use this opportunity to learn more of how other regional and international bourses operate."

Addressing IPO feasibility and how to assess whether private entities are ready to list, is only one side of the coin as are the responsibilities that come with being a listed company and the desire to accept long-term obligations. Public disclosure of preparation, justification to launch and long-term business strategy, are all an integral part of openness and transparency which breeds investor confidence in IPOs.

"Recognising market trends is vital and should have a major bearing on any company's decision to go public or not. The goals and ambitions of a company should complement the bourse chosen whilst the timing of the IPO is also critical," added Deep Marwaha, Conference Manager, Saudi IPO Summit.

During the two-day conference, debates and discussion amongst investment experts, regulators and market leaders will also focus on improved regulatory and industry standards, reporting standards and internal audit, management changes and restructure. It will also address the costs associated with IPOs and the long-term obligations of public companies as well as the critical factors underpinning oversubscriptions, over-pricing and macro-economic issues affecting IPOs.

An impressive line-up of international and regional financial and investment industry experts are expected to speak at the event including amongst others, HE Dr. Fawaz Al Alamy, Deputy Minister of Commerce & Industry, KSA, Dr. Abdulrahman Al Zamil, Chairman, Zamil Group, Yassir Rumayyan, Head of Listing, Capital Market Authority, KSA, Ioannis Karapatakis, Managing Director - Global Investment Banking Advisory, HSBC, Omar M. El Quqa, Executive Vice President - Corporate Finance & Treasury, Global Investment House, Brad Bourland, Chief Economist, SAMBA.

The event is sponsored by; Samba, Global Investment House, Abraaj Capital, Audi Saudi Arabia, Al Tawfeek Financial Group, Banque Saudi Fransi, The National Investor and Zawya.