Mesaieed Petrochemical Holding rose more than five fold on its first day of trading after completing the country’s biggest initial public offering in five years.
The shares closed at 55 riyals after opening at 10 riyals on the Qatar Exchange. The stock rose as high as 73.9 riyals during the day.
State-run energy company Qatar Petroleum raised 3.2 billion riyals ($880 million) by selling a 26 percent stake in Mesaieed to Qatari nationals last month. The share sale is the nation’s biggest since Vodafone Qatar raised $1 billion in 2009, and the largest first-day gain for an IPO in the Middle East and Africa since 2009 when Saudi Arabia’s Ace Arabia Cooperative Insurance Co. (ACE) sold shares, according to data compiled by Bloomberg.
“The IPO was at 10 riyals which is a significant discount to what this company is worth,” Bobby Sarkar, head of research at Qatar National Bank Financial Services, said in a phone interview. “This is a solid petrochemical, QP-backed company.”
Mesaieed was formed in September and owns Qatar Chemical Co., Qatar Chemical Co. II and Qatar Vinyl. The government valued the company at 12 billion riyals for the IPO, below an initial valuation of 16.7 billion riyals, Finance Minister Ali Al Emadi said last month. Foreigners are allowed to trade in the company’s shares once they have been listed.
Mesaieed is the first company to be listed on the country’s bourse since MSCI Inc. (MSCI) agreed to upgrade Qatar to emerging-market status in June. It raises to 43 the number of companies traded on the Qatar Exchange, Chief Executive Officer Rashid al Mansoori said in an interview in Doha today.
“This number should increase in the next few years,” Mansoori said. The Qatar Exchange is studying the “legal ground” for derivative trading and is in “advanced” stages of planning an exchange-traded Shariah fund, the country’s first ETF, with bank Masraf Al Rayan, he said.
The country, holder of the world’s third-largest gas reserves, passed a law this month exempting foreign investors in listed companies from paying taxes on their investments.
Companies including Barwa Bank QSC are planning IPOs and Qatar Petroleum seeks to list about four companies in the next 10 years worth as much as 50 billion riyals total, Mansoori said.