Aluminum Bahrain Plans Listing on Saudi Arabia Exchange

Aluminium Bahrain, the second-largest aluminum smelter in the Middle East, is planning to cross-list its shares in Saudi Arabia, according to four people familiar with the matter.

Aluminium Bahrain, also known as Alba, is seeking to improve its valuation rather than raise money from the listing, the people said, asking not be identified as the plan isn’t public. Alba has a primary listing in Bahrain with its global depository receipts trading in London.

The metals producer is hoping to capitalize on investor interest in Saudi Arabia as the biggest Arab stock exchange opens to direct foreign investment for the first time in 2015. The Saudi Tadawul benchmark index gained 30 percent this year and is the sixth best performing stock index in the world, according to data compiled by Bloomberg. The compares with a 17 percent advance for the Bahrain Bourse All Share Index.

“Alba is trading at a discount compared to its global peers even as aluminum prices are improving,” said Nitin Garg, senior analyst at Securities and Investment Co., in Bahrain. “This is partly because of the low liquidity in the stock.”

Alba raised $339 million in 2010 by selling shares at the low end of its price range, with the stock dropping 45 percent since their listing. Bahrain sovereign wealth fund Mumtalakat owns 69 percent of Alba, while Saudi Basic Industries Corp. holds about 21 percent, according to data compiled by Bloomberg.

An Alba spokeswoman in Manama, Bahrain, declined to comment when contacted yesterday by phone.

The shares have declined 6 percent this year, compared with a 57 percent advance for Alcoa Inc., the largest U.S. aluminum producer.

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