Muscat: The private placement of OQ Exploration and Production (QQEP) Company is an important milestone for the Muscat Stock Exchange, the economy, and investors, as it is the largest IPO of the Sultanate of Oman and also the largest of this year in the Arabian Gulf.
Dr. Al Moatasem bin Musabah al Mutairi, Head of Investment at Bank Sohar International (Issue Manager), said that as per the prospectus approved by the Financial Services Authority, 800 million shares of the offering have been allocated to individuals (Category II investors), equivalent to 40 percent of the offering size.
The individual category has been divided equally into two parts, where half of this category, equivalent to 20 percent of the offering size, will be allocated to applicants from large individual investors, who apply for 28,600 shares or more, while the other half, equivalent to 20 percent of the offering size, will be allocated to applicants from small individual investors, who apply for subscription for several shares from 500 shares to 28,500 shares.
He added that if the total demand for the second category (individuals, including small individual investors and large individual investors) is less than 40 percent of the offering size, all the shares subscribed for by all applicants from the second category will be allocated to individuals, and the remaining unsubscribed shares from this category will be transferred to applicants from the first category (institutional category) at the offering price, according to the allocation mechanism for that category, provided that there is an excess demand for subscription from the first category.
He said that if the total demand in the second category exceeds 40 percent of the offering shares allocated to this category estimated at RO312 million, which is greater than the total size of the previous subscription for OQ Gas Networks in all its segments), the FSA reserves the right, according to the issuance prospectus, by the procedures in force to approve the distribution of a minimum number of allocated shares only to the category of small individual investors equally, whereby the remaining shares are distributed proportionally in the same category.
He pointed out that the allocation approved in the issuance prospectus by the Authority for the category of small individual investors is based on a ratio and proportion mechanism, but the Authority reserves the right to regulate the allocation mechanism if the requests of applicants in this category exceed the percentage allocated to it by several times, which may affect the allocation percentage for small requests.
Abdul Wahid bin Mohammed al Murshidi, Head of Islamic Banking at Bank Sohar, said that the subscription received great interest since the first day of the offering, noting that the size of the offering allocated to institutions was covered by more than 100 percent in the first two days of the subscription.
He added that the high demand for this offering, coupled with the great confidence of global investment companies and institutions, is a milestone for the Muscat Stock Exchange, indicating that most brokerage firms and financial research houses have valued the share price between 440 and 458 baisas.
Mustafa bin Ahmed Salman, chairman and CEO of United Securities, said that OQEP IPO is one of the best IPOs currently and represents a major support for the Muscat Stock Exchange, and is witnessing wide interaction from institutions, investors, and individuals to subscribe to it.
He stressed that studies conducted by some brokerage and financial analysis companies show that this subscription is good in terms of return price, and they expect the stock to achieve a 20 percent increase in the price of Omani individuals, pointing out that there are large requests from several international companies from outside the Sultanate of Oman to subscribe to the shares of OQEP, which is one of the companies operating in the fields of oil and gas.
He explained that such subscriptions add capital to the Muscat Stock Exchange and attract funds to the Sultanate of Oman, which encourages other companies to go to the stock exchange, list on it, and enhance their performance.
Louay Bataineh, CEO of Ominvest International Holding Company, said that the nature of the subscription gave the Omani citizen a privilege with an encouraging discount price to enter this subscription, which represents a government company operating in oil and gas and has strategic investments with other partners.
He stressed that upon completion of this subscription and listing, it will attract liquidity to the market and will help upgrade the Muscat Stock Exchange to an emerging market through the entry of investors and the entry of new categories of investors in the stock exchange from investment institutions, whether from Asia, Europe or the American market, pointing out that the Oman Investment Bank and Omani banks marketing this issue and coordinating with international banks will lead to other issues working well.
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