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Brokerage’s stock rises 30%
Maximum for new listings
Could encourage other brokerages
Shares in the online brokerage Derayah Financial rose by 30 percent on their first day of trading, the maximum allowed for newly listed companies, the Saudi stock exchange said.
Derayah, the third-largest broker in Saudi Arabia, floated 20 percent of its shares on the Tadawul, the main market of the Saudi Stock Exchange, in a SAR 1.5 billion ($400 million) initial public offering.
The shares started the day at SAR 30 per share and rose to SAR 39 within hours of opening, giving Derayah a market valuation of SAR 9.7 billion ($2.6 billion). The float came after a bookbuilding process that was 162 times oversubscribed, the company said.
Abdulaziz bin Hassan, chairman of the Tadawul board, said in Riyadh last week that the Capital Markets Authority issued a record number of IPO approvals last year and has a backlog of between 50 and 55 applications. Most of these, he said, were in “new sectors”, including aviation.
Derayah Financial is the first brokerage to float on the main market. It had assets under management of SR17 billion last year. Its CEO, Mohammed AlShammasi, told AGBI that he expects the IPO to encourage other financial services companies to do the same.
“We think this will pave the road for more players like us to be listed,” AlShammasi said. He said that several peer companies were working on share offerings.
“We think this will be a benchmark transaction in the market and will encourage not only local ones but also regional players all in the same space to really think about listing their operations,” he said.
AlShammasi said Derayah chose to launch the IPO to increase recognition and credibility in the region: “We have had very patient shareholders, and I think it’s time for us to realise some of that gain in taking the company to the market.”
Derayah Financial’s chairman and founder, Taha AlKwaiz, called the IPO a historic moment for the company. Before founding Derayah in 2009, AlKwaiz was the chairman of AlJazira Bank and vice-chairman of the Saudi Stock Exchange.
