Citigroup was selected after beauty parades in mid-April for international banks, which included Deutsche Bank and Morgan Stanley. The multi-billion-dollar share sale is due to be staged by the end of the year. KHC owns a minority stake in Citigroup.

More imminently, the Capital Market Authority (CMA) has approved plans for the initial public offerings (IPO) of shares in Saudi Paper Manufacturing Company. The share sale will run from 24 April-3 May and 30 per cent of the company's SR 240 million ($64 million) capital is being floated, divided into 7.2 million shares. Gulf International Bank is the financial adviser.

Expected to follow shortly after is the IPO of shares in Saudi International Petrochemical Company (Sipchem). The National Commercial Bank is the financial adviser. The project company for King Abdullah Economic City could also come to market sooner than anticipated, possibly in late May. HSBC is advising (MEED 3:2:06).

However, the primary market has felt some of the fall-out from the sharp fluctuations on the TASI. The CMA in mid-April announced approval for the IPO of shares in Ajlan bin Abdulaziz al-Ajlan & Brothers, which was due to run concurrently with the Saudi Paper sale. However, the planned IPO has now been postponed.

'Officially, this was at the company's request, but the feeling is that the financial advisers warned that taking a clothing company public under current market conditions was unwise,' says a Riyadh-based analyst. 'But the concept of the CMA allowing simultaneous IPOs would have been interesting. And the recent spate of approvals indicates that the regulator has recognized the need to pick up the pace of share offerings to take the heat out of the secondary market, although it is not an ideal time for liquidity to be sucked out of the bourse.'

So far, the evidence suggests that investors' enthusiasm for IPOs has not been dented. The sale of shares in Saudi Research & Marketing Company closed on 17 April four times oversubscribed. Samba was the arranger (MEED 7:4:06).

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