Mobile telecoms operator Wataniya Palestine attracted more than 11,000 investors for its initial public offering (IPO), which closed 1.5 times oversubscribed on 2 December, on the back of strong retail demand.
“Wataniya’s IPO attracted more than 11,000 new subscribers, the vast majority of which were retail,” says Ahmad Aweidah, chief executive officer of the Palestine Exchange (PEX).
“Anything above 10,000 is a big achievement for a market like ours, especially in the current climate.”
Aweidah says the funds raised could be higher than the $75m figure announced on 4 December. Wataniya had targeted raising proceeds of $50.3m through selling 15 per cent of the company’s shares, priced at $1.30 a share.
“I think the figure could be as high as $80m – the final figure will be confirmed once all the bank transfers have been accounted for in the next few days.”
Aweidah is confident that Wataniya’s share price will increase once the company starts trading on the PEX in the first week of January 2011, driven by renewed demand.
“Given the fact the IPO was oversubscribed, I think a lot of people who were sceptical before will now try to buy shares once they start trading, and therefore the price will go up,” he says.
“I am also confident about the company’s long-term performance – the market has huge potential because it is very underpenetrated and has a very young population.”
Palestine’s mobile penetration rate stood at 49 per cent at the end of 2009, while its population stood at 3.9 million, with approximately 52 per cent under the age of 19.
Meanwhile, Palestinian Global United Insurance’s IPO was oversubscribed by $100,000 after raising $1.3m – it had targeted funds of $1.2m through offering 1,250,000 shares valued at $1 per share.
The subscription process opened on 10 November and closed on 2 December, and was being offered through the branches of Jordan-headquartered Arab Bank.
“That IPO was much smaller – I think it attracted just below 1,000 subscribers,” says Aweidah.
Palestine Mortgage and Housing Corporation (PMHC) and Dar al-Shifa Company for Manufacturing of Pharmaceuticals (Pharmacare), with respective paid-up capitals of $15m and $7m, are the next companies in line to list on the PEX.
“They have both now submitted their applications to the exchange,” says Aweidah. “If they don’t happen in December, then they’ll definitely take place within the first quarter of 2011.”
The number of shares they will be offering is not yet known, but public shareholding companies are mandated by law to offer a minimum 25 per cent stake.
In July this year, the PEX also began work on setting up a national clearing and depository company, which will operate as a subsidiary of the exchange. It is partnering with the country’s central bank, the Palestine Monetary Authority (PMA), as well as Bank of Palestine and Arab Bank, in setting it up.
“Post-trade services for investors and issuers represent an opportunity to introduce new revenue streams,” says Aweidah.
“We have drawn up a skeleton concept of what the company will do and we expect to conclude our plans in early 2011.”
Today, there are 41 companies listed on the PEX with a combined market capitalisation of about $2.5bn.