The IPO market is struggling this year, with several companies postponing their plans to next year due to volatility and uncertainty, the Wall Street Journal cites bankers, lawyers, and corporate executives as saying.

Expectations of a slowdown in September — usually a busy month for IPOs — point to underlying concerns among investors that volatility could continue through the end of the year amid the upcoming US presidential election in November and potential interest rate cuts by the Federal Reserve.

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By the numbers: IPOs in the US have raised some USD 25 bn this year, faring well below the USD 55 bn annual average over the past decade. Both Chinese autonomous-driving technology company WeRide and ticket-resale platform StubHub pushed back their IPO plans, while AI chip maker Cerebras is among those considering pushing its IPO to late 2024 or holding off until next year.

Market turbulence has dampened investor confidence, with many companies that went public in the past two and a half years now trading below their IPO prices, with the exception of Reddit’s successful IPO earlier in March, up more than 70% from its USD 34 IPO price.

There’s still hope for smaller companies: The Russell 2000 index of smaller companies has outperformed the S&P 500 by more than five percentage points since late June. “Since the majority of IPOs are for relatively small companies — under USD 5 bn in value at the time of their offerings — the recent gains for this group is encouraging,” the WSJ said.

TASI

12,145

+0.2% (YTD: +1.5%)

MSCI Tadawul 30

1,516

+0.2% (YTD: -2.3%)

NomuC

26,161

-0.2% (YTD: +6.7%)

USD : SAR (SAMA)

USD 3.75 Sell

USD 3.75 Buy

Interest rates

6.5% repo

5.5% reverse repo

EGX30

30,774

+0.2% (YTD: +23.6%)

ADX

9,285

+0.6% (YTD: -3.1%)

DFM

4,326

-0.2% (YTD: +6.5%)

S&P 500

5,648

+1.0% (YTD: +18.4%)

FTSE 100

8,377

0.0% (YTD: +8.3%)

Euro Stoxx 50

4,958

-0.2% (YTD: +9.7%)

Brent crude

USD 76.93

-2.4%

Natural gas (Nymex)

USD 2.13

+0.5%

Gold

USD 2,527.60

-1.3%

BTC

USD 58,955.70

-0.2% (YTD: +39.5%)

THE CLOSING BELL: TADAWUL-

The TASI rose 0.2% on Thursday on turnover of SAR 12.2 bn. The index is up 1.5% YTD.

In the green: Allianz Saudi Fransi (+6.5%), Kingdom Holding (+5.0%) and National Company for Learning and Education (+4.4%).

In the red: AlRajhi Takaful (-4.3%), Saudi Pharma Industries (-3.2%) and Amiantit (-3.1%).

THE CLOSING BELL: NOMU-

The NomuC fell 0.2% on Thursday on turnover of SAR 85.3 mn. The index is up 6.7% YTD.

In the green: Al Razi Medical (+9.7%), Naba Alsaha Medical (+7.0%) and Lime Industries (+6.8%).

In the red: Saudi Top for Trading (-10.9%), Arabian Plastic Industrial (-8.9%) and Knowledge Tower (-7.9%)

CORPORATE ACTIONS-

#1- Allied Cooperative Ins. Group has submitted an application with the CMA to increase its capital by SAR 209 mn via a rights issue, bringing its capital to SAR 500 mn, it said in a disclosure to Tadawul.

#2- Saudi Ground Services will distribute SAR 188 mn in dividends at SAR 1 per share for 1H 2024, it said in a disclosure to Tadawu l. Distribution is set for Monday, 30 September.

#3- National Environmental Recycling is mulling a decision that would see it double its capital to SAR 116.2 mn by issuing bonus shares, according to a filing to Tadawul. The move would be financed through capitalizing SAR 58 mn of the company’s retained earnings.

#4- Electrical Industries’ board signed off on a three-year minimum dividend payment policy, according to a filing to Tadawul. The company will distribute no less than SAR 0.125 per share to its shareholders on a semi-annual basis over the next three years, beginning in 2H 2024 and ending in 1H 2027. Additional dividend payments will be considered depending on the company’s financial outlook.

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