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Saudi’s Tadawul IPO 442.53% Oversubscribed

Saudi Tadawul is preparing to list on Wednesday (Asharq Al-Awsat)
Saudi Tadawul is preparing to list on Wednesday (Asharq Al-Awsat)
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Saudi’s Tadawul IPO 442.53% Oversubscribed

Saudi Tadawul is preparing to list on Wednesday (Asharq Al-Awsat)
Saudi Tadawul is preparing to list on Wednesday (Asharq Al-Awsat)

Shares of Tadawul group will begin trading on the main market on Wednesday, Dec. 8.

The individual subscribers’ tranche of Tadawul’s initial public offering was 442.53% oversubscribed with a total demand of SR5.02 billion ($1.3 billion).

The stock exchange group was offering 10.8 million shares to individual investors, or 30% of the total offer shares at a final price of SR105.

Around 598,327 subscribers participated in the period. The subscription period started on November 30.

The IPO will provide an important strategic dimension to realize Tadawul’s expansion plans, strengthen its position globally, and align its growth objectives with the Public Investment Fund’s strategy to boost the economic transformation of Saudi Arabia.

Tadawul had earlier increased the size of the offering for retail investors to 30%, up from 10% initially, to encourage the participation of individual investors.

Subscribers will each receive a minimum of 10 shares, while those remaining will be allocated on a pro-rata basis.

The shares will be listed on the main index of the Saudi Exchange once all listing formalities are complete. Citigroup, JP Morgan Chase and SNB Capital are financial advisers and global coordinators for the IPO.

Tadawul is among the top 10 global stock markets with a market capitalization of about $2.8 trillion.

Tadawul Group has four subsidiaries that include the Saudi Exchange, a dedicated arm running the kingdom’s equity market previously known as the Saudi Stock Exchange Company; the Securities Clearing Centre Company, known as Muqassa; the Securities Depository Centre Company (Edaa); and a new subsidiary focused on applied technology services, known as Wamid.

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Positive Outlook for Saudi Stock Market Next Week

A trader monitors the screen at the Saudi Exchange in Riyadh. (AFP)
A trader monitors the screen at the Saudi Exchange in Riyadh. (AFP)
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Positive Outlook for Saudi Stock Market Next Week

A trader monitors the screen at the Saudi Exchange in Riyadh. (AFP)
A trader monitors the screen at the Saudi Exchange in Riyadh. (AFP)

Saudi Arabia’s Tadawul All Share Index (TASI) ended the second week of March with a slight decline for the third consecutive week, closing down 0.73% at 11,725.88 points, compared to the previous week's close of 11,811.11 points.

In an analysis of the market performance during the week ending March 13, Dr. Suleiman Al-Humaid Al-Khalidi, a financial market analyst, told Asharq Al-Awsat that the market experienced a sharp decline not seen in years, coinciding with a drop in global markets, particularly in the US, where $2 trillion in value was wiped out in a single day.

This accounted for roughly 60% of the total market value of the Saudi stock market.

Al-Khalidi noted that the key player in the Saudi market is the banking sector, especially Al-Rajhi Bank's shares, which showed resilience and did not follow the downward trend. This was attributed to the strong profits reported by the banking sector in 2024.

The primary factors contributing to the market’s decline include global economic pressures, particularly US tariffs on most global economies, ongoing global uncertainty, and the Federal Reserve's tight monetary policies, he explained.

These factors have significantly impacted liquidity flows into financial markets. Additionally, fluctuations in global oil prices, despite recent stability, have also played a role.

This downturn has been accompanied by caution among sovereign wealth funds, investment institutions, and some portfolios in injecting new liquidity or altering their positions until there is more clarity in the financial markets, he went on to say.

Moreover, Al-Khalidi said that the Saudi stock market has not accurately reflected the true strength and size of the Saudi economy, which has grown to SAR 4 trillion, up from SAR 600 billion in 2016, before the launch of Vision 2030.

Additionally, the country’s GDP has reached approximately $1.1 trillion.

Looking ahead to the market's performance in the coming week, he noted that there are strong support levels at 11,550 points, followed by 11,450 points.

These levels could help shift the market toward an upward trajectory and better reflect the robust growth of the Saudi economy.

Al-Khalidi emphasized that the banking and energy sectors could play a leading role in driving the market higher, pushing the index beyond this week’s closing levels.

He also pointed out that some stocks are hitting new lows, presenting significant investment opportunities for those seeking safe havens with steady returns in the Saudi market.