Saudi, UAE IPOs whet investor appetite

The value of the Emaar Malls IPO is valued at an estimated AED 5 billion ($1.36 billion)

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Emaar Properties’ unveiling of plans to divest 15 percent or more in a public equity issue in its mall subsidiary has increased investor appetite for UAE stocks while Saudi Arabia’s National Commercial Bank, the kingdom’s largest lender, will in October likely announce an even larger IPO, according to the CIO office at Emirates NBD Wealth Management.

The value of the Emaar Malls IPO is valued at an estimated AED 5 billion ($1.36 billion), a significant amount for the UAE market, which has a capitalization of AED 789 billion.

Saudi Arabia’s TASI, which surpassed the 11,000 mark, was the best performer among GCC equity indexes following the announcement of the Saudi market opening up to foreign direct investment, the CIO office said.

Also contributing to the uptrend were eexpectations of strong global demand for petrochemical stocks. “We expect continued interest in large-capitalization sectors i.e. financial services and petrochemicals. Rotation into laggards can also be seen, with interest in Al Rajhi Bank and SIPCHEM building up as investors go bargain-hunting,” it added.

Meanwhile, Saudi Arabia’s Monetary Authority updated laws regulating loans extended to consumers by local banks. The revised regulations may increase growth in consumer loans following a decline over the past few quarters.

And the Qatari index, which saw a 2 percent surge in the previous week, reversed its gains as passive fund managers completed their portfolio adjustments prior to the MSCI Emerging Market Index rebalancing date (end August), the CIO office said.

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