GCC IPO stocks jump 185% on day one

If the trend of huge stock price appreciations on GCC bourses is anything to go by, investors in the initial public offering (IPO) of Ace Arabia Cooperative Insurance, due to be listed on the Saudi Tadawul today, can expect handsome returns on their investment during the first session of trade today. Exclusive research by Emirates Business reveals that despite regional stock markets witnessing some of their worst declines in the previous six to nine months and primary equity issuance all but drying up, investor interest in IPOs remains intact, with first-day stock price appreciations averaging 185.4 per cent for the seven GCC listings so far this year. This compares favourably with 166 per cent average first-day appreciation for 28 IPOs listed on the GCC exchanges (including two on Nasdaq Dubai) in 2008. With four listings, Saudi Arabia, the Arab World's largest economy, has been responsible for the majority of GCC IPOs issued this year, including yesterday's listing of AXA Cooperative Insurance Company, which saw stock price appreciation of 265 per cent on debut. The Saudi bourse was also responsible for the bulk of listings in 2008, accounting for 16 of 28 IPOs. Stock markets in Abu Dhabi, Dubai and Doha are responsible for one listing each while Bahrain, Oman and Kuwait have not seen any primary listings this year. In 2008, Dubai Financial Market (DFM) and Kuwait Stock Exchange bourses saw three listings each while Muscat Securities Market and Nasdaq Dubai witnessed two companies getting listed. Abu Dhabi and Qatar saw one listing each while no firm listed on the Bahraini exchange in 2008. Saudi Arabia has also seen the maximum stock price appreciation on debut, with IPOs from the kingdom appreciating 319.5 per cent on average on the first day of their listing in 2009 year-to-date and 170.4 per cent in 2008. The share price of Saudi Arabia's Al Rajhi Company for Cooperative Insurance saw the maximum appreciation on the first day of its listing, going up by 670 per cent on debut earlier this month on July 13.Shares of Drake and Scull International, the only firm to list on the DFM this year, declined 26 per cent on debut on March 16, 2009. Abu Dhabi Exchange-listed Green Crescent Insurance Company saw its share prices climb 32 per cent on the first day of listing ie on March 26. Arabia Insurance Co-operative Company, another Saudi firm, was the top gainer last year, with its share prices rising 680 per cent on debut on February 4, 2008, while Nasdaq Dubai-listed Depa was the top (and only) loser last year, with its share prices declining 1.29 per cent on debut. The company is looking at options to halt decline, according to its CEO Mohannad Sweid. Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here .