Saudi Staffing Firm SMASCO Sets IPO Price Amid Market Slowdown

What’s going on here?

Saudi Arabian staffing company SMASCO has set its final IPO price at 7.50 riyals per share, aiming to raise up to 900 million riyals ($240 million) on the Saudi Exchange.

What does this mean?

SMASCO’s IPO plans involve offering 120 million shares, representing a 30% stake in the company. Individual investors have access to 10% of these shares, with the subscription window opening next Sunday and closing the following Monday. While regional IPO activity includes recent listings such as Saudi flour mills company Modern Mills, UAE’s Spinneys, and Kuwait’s BIG Holding, the broader Middle East and North Africa (MENA) IPO market has seen a 66% decline in proceeds this year. Companies in the region raised $1.2 billion in the first quarter, compared to the previous year’s influx, according to EY.

Why should I care?

For markets: Navigating the IPO slowdown.

Despite the decrease in IPO activity, SMASCO’s offering underscores ongoing efforts to deepen capital markets in the MENA region. Investors should note that while there is a recent trend of slowing IPO proceeds, opportunities within strategically important sectors, such as staffing, may still offer growth potential.

The bigger picture: Broader economic ambitions.

The push for more IPOs in the MENA region reflects a larger ambition to grow the private sector and attract foreign investments. Initiatives to energize regional capital markets and offer diversified investment opportunities are critical to sustaining long-term economic growth across these countries.