Fawaz Alhokair IPO plans hailed as “bold”

IPOA Saudi Arabian retail and real estate group plans to raise $2 billion from the initial public offering (IPO) of its Arabian Centres malls unit in 2016.

The move by Fawaz Alhokair Group was described as a “bold decision” by Muhammad Anum Saleem, a Riyadh-based senior associate for law firm Eversheds. He said it was brave in light of the recent correction of the Saudi stock exchange due to falling oil prices.

“Although the IPO is scheduled to happen in 2016, I think, the company would have liked to ride the recent wave, generated by the Saudi government’s decision to open Tadawul [the Saudi stock exchange] to foreign investors,” says Saleem.

The lawyer says he thinks the IPO will be well received when it comes to the market. He says the retail sector has been a safe environment for investors in Saudi Arabia over the past few years, and consumer spending is estimated to continue rising, creating a favourable atmosphere for the offering.

The sale has the potential to outshine another recent IPO, from Dubai-based real estate development company, Emaar Properties. Emaar listed its malls and retail business unit on the Dubai Financial Market earlier this year, in a $1.6 billion offer.

©2014 funds europe

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