MPHC’s equity offer oversubscribed 5 times

January 30, 2014 - 2:46:44 am

DOHA: The initial public offering (IPO) of Mesaieed Petrochemical Holding Company (MPHC) that was open to nationals for subscription was oversubscribed five times.

The share allotment process is successfully over, the company announced yesterday. 

A maximum of 1,633 shares were allotted to individual applicants. Those who applied for less were allotted the number of shares they wanted.

The IPO was priced at QR10.20, and financial and stock analysts expect the listing price of the shares to be anywhere between QR20 and QR60.

Foreigners will be allowed to trade in the shares after listing, but due to the fact that only 323.2 million shares were on offer through the IPO, and restrictions on its trading by citizen-owners, non-Qataris will have access to only a small percentage of the company’s floating shares, analysts said. 

The MPHC, promoted by the state’s energy arm, Qatar Petroleum (QP), is expected to be listed on the Qatari bourse (Qatar Exchange) by February-end.

Nobody seems to be sure as to what percentage of floating shares would be made accessible to foreigners for trading, but some analysts say they hope it is up to 49 percent.

As for the listing price, analysts’ estimates vary widely.

Some suggest it could be up to QR20 to QR25, while others see it going up to QR40 and even QR60.

Financial analyst Abdullah Al Khater said market operators were expecting the listing price to range between QR40 and QR60. Legal and financial expert Abdullah Taher, who initially suggested the maximum share allotment per IPO applicant could be 1,600, was conservative in his estimate.

“I think the listing price should be between QR20 and QR25,” said Taher. 

Al Khater said some successful subscribers could sell half the allotted shares on listing to organise funds so they could repay loans and meet other financial commitments. “But, I think, most owners would like to retain the shares over five to 10 years for bonus,” he said.

Al Khater and Taher said they wouldn’t be able to guess as to what percentage of the floating shares of the company would be available for foreigners to trade in.

The Minister of Energy and Industry and Chairman and Managing Director of QP H E Dr Mohamed bin Saleh Al Sada expressed delight at the successful completion of the historic equity offer.

“The overwhelming response to the IPO reflects Qatari nationals’ confidence in the strength and durability of the national economy and the policies pursued by the government under the directives of The Emir, H H Sheikh Tamim bin Hamad Al Thani,” said the Minister.

He reiterated that the IPO was to encourage long-term investment among fellow Qataris. By retaining their shares for longer periods of time they would reap the benefits of long-term investment, said Al Sada. The Peninsula

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