Saudi Arabia’s Lumi Rental Co. surged as much as 30% on trading debut after a 1.09 billion riyal ($290 million) initial public offering, showing demand for listings remains resilient after a slow first half of the year.
(Bloomberg) — Saudi Arabia’s Lumi Rental Co. surged as much as 30% on trading debut after a 1.09 billion riyal ($290 million) initial public offering, showing demand for listings remains resilient after a slow first half of the year.
Shares in the car rental firm opened at 72.6 riyals on Monday up from the offer price of 66 riyals per share. Lumi drew over $27 billion in bids from institutional and retail investors during its IPO, with the portion reserved for funds almost 95 times oversubscribed. The stock rose by the maximum allowed 30% to 85.8 riyals apiece.
The strong debut is a positive sign for other companies in the queue to go public. Oil driller ADES Holding Co. priced its $1.2 billion IPO at the top of the range last week after investors piled in with $76.5 billion of orders. Cargo firm SAL Saudi Logistics Services Co. opened books for its IPO of as much as $678 million on Monday.
Ades and Lumi Rental will bring Saudi Arabia’s IPO haul for the year to $2.41 billion, which is still 46% below where it was a year ago, data compiled by Bloomberg show. Share sale activity in the kingdom had come to a virtual standstill in the first five months of the year as the benchmark Tadawul index fell about 28% from a 2022 peak on lower oil prices and concerns of a possible global slowdown.
The outlook has brightened on the back of production curbs by Saudi Arabia and Russia that have tightened the oil market and sent prices toward $94 a barrel, a 10-month high. The Tadawul rallied almost 20% from its March low through to late July, though it’s recently pared those gains.
The two companies that reopened the Saudi IPO market at the start of the summer, Generic drugmaker Jamjoom Pharmaceuticals Factory Co. and flour milling firm First Milling Co., were also met with strong investor demand and remain well above their offering prices. Jamjoom Pharma has almost doubled while First Milling has climbed 20%.
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