Emerging Markets Roundup: Middle East

SAUDI ARABIA REOPENS IPO MARKET WITH TELECOM ISSUE

 

By Gordon Platt

 

The first initial public offering of the year in Saudi Arabia, home of the Arab world’s largest stock market, attracted more than 638,000 subscribers, more than 92% of them male, according to Albilad Investment, the financial adviser and lead manager for the issue.

 

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Bahrain loses appeal as funds haven

Saudi Integrated Telecom raised about $95 million in its IPO in May for 35% of its share capital, or 35 million shares.

 

The Egyptian stock market was among the hardest hit in the region in the first quarter, with a loss of 22.5% after being closed for February and most of March. The United States is considering a range of options—in addition to the $1 billion in debt relief offered by President Obama—to help Egypt through its transition, according to State Department spokesman Mark Toner. He said that under secretary of state Robert Hormats had held discussions with Egyptian officials last month about how the US might help Egypt economically.

 

Bahrain’s central bank says assets held by offshore banks declined by 10% in March to the lowest level in six years, while assets of local and regional banks in the country were stable throughout the political unrest of February and March. The financial sector contributes 25% of the kingdom’s gross domestic product. Neighboring Qatar and Dubai are the main beneficiaries of Bahrain’s loss of appeal as a safe haven for offshore funds, bankers say.

 

Research by the International Finance Corporation shows that 70% of firms in the Middle East and North Africa do not have access to credit. The region scored 3 out of 10 on the strength of legal rights of borrowers and lenders, according to IFC/World Bank’s Doing Business 2011 report.

 

The IFC announced a $3 million loan to microfinance lender Palestine for Credit and Development to support small businesses in the West Bank and Gaza. As part of the project, IFC will advise the lender on how to implement best practices so that it can continue to serve potential entrepreneurs.

 

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