The shares had been sold at SR10 ($2.70) each. By the end of the first day’s trading on 23 March, the Saudi subsidiary’s shares had reached SR21. This valued it at more than Etihad Etisalat, which operates the Mobily mobile network in Saudi Arabia and which has a market capitalisation of SR30bn.

However, Zain Saudi Arabia’s share price fell back in subsequent days due to profit-taking by shareholders, according to analysts. By the close of trading on 26 March the share price was SR19.75, giving the company a market capitalisation of SR27.7bn.

The valuation is seen as high, given that the business will not sign up its first customer until June. “It does not make any sense to me,” says Jithesh Gopi, a senior analyst at Bahraini bank Sico. “Why should I, or anyone else, be willing to pay almost the same price for Zain that I can get for Mobily?”

Marwan al-Ahmadi, chief executive officer of Zain’s has set a target for the company to take 33 per cent share of the mobile phone market in Saudi Arabia.

However, if the original shareholders continue to book their profits, the shares will fall further.

The value of Kuwait’s Zain, which has 25 per cent of the shares as well as management control of Zain Saudi Arabia, followed the same path on the Kuwait Stock Exchange. Its market capitalisation briefly climbed above $30bn before falling by 4.1 per cent on 26 March to $27.5bn.

The Gulf’s out-of-control inflation rates continued to worry traders who are increasingly looking for signs that the macroeconomic environment is hurting individual companies.

“Real interest rates are negative. There are a lot of concerns in the market about inflation. Real inflation is significantly higher than the authorities are making out,” says Gopi.