Qatari investors have extended a rousing welcome to the Qatar Aluminium Manufacturing Company's (Qamco) initial public offering (IPO), which was oversubscribed 2.5 times, reflecting their confidence in the country’s economy and its capital market.
The oversubscription was confirmed by Qatar Petroleum (QP), the sole founder of Qamco, which has a proposed issued share capital of QR5.58bn of 558.01mn ordinary shares and one special share with nominal value of QR10 each.
The country’s hydrocarbon bellwether, QP, offered 273.43mn shares of Qamco at QR10.1 (including the listing costs of 10 dirhams) and the IPO closed for subscription on Monday. The country's commercial banks had extended loans to Qataris on liberal terms for subscribing into the IPO.
"The successful subscription of the IPO reflects the strength of Qatar’s economy, and the confidence in the State’s economic policies pursued under the Qatar National Vision 2030, which support the development of Qatar stock market,” according to HE Saad bin Sherida al-Kaabi, the Minister of State for Energy Affairs, president and chief executive of QP.
The allocation of shares is expected to be finalised and announced on November 25, 2018, and any refunds to shareholders will be made on the same date. Individual applicants will be advised of their subscriptions via SMS. The shares are planned to be traded on the Qatar Stock Exchange in December 2018.
“The response (from Qataris) to the IPO is good considering the present situation, although the previous maiden offer from the QP’s stable had seen much higher oversubscription,” an analyst said, referring to the IPO of Mesaieed Petrochemical Holding Company.
After the IPO, QP will have 51% stake (in Qamco) and the balance 49% with the public. Of the 49% IPO, as much as 44% or 245.53mn shares would be allotted for individuals and the remaining 5% or 27.9mn shares for select institutions.
In the first allocation tranche, subscriptions of 50-750 offer shares (inclusive) will be allotted in full and in the second tranche, subscriptions of more than 750 offer shares will be allotted in multiples of 50 offer shares.
The move comes in the backdrop of His Highness the Amir's directives to enhance strong investment opportunities and instill a culture of long-term savings for Qatari investors and their progeny.
In its 2013 strategy, QP had said it was contemplating a series of IPOs for its subsidiaries over the next 10 years, after launching the maiden offer of Mesaieed Petrochemicals Holding Company.
Post listing, the analyst said, would add to the breadth of the market and will give investors more choice. “Now that QP has led from the front, investors’ confidence ought to strengthen, which in turn, will encourage other entities to come to the market,” the analyst said.
At present, the Qatar Stock Exchange has 45 listed companies with 13 in the banks and financial services sector, nine each in the industrials and the consumer goods, five in the insurance, four in the real estate, three in the transport and two in the telecom sector.