Tadawul IPO said to be delayed on higher valuation hopes

The Saudi Stock Exchange’s (Tadawul) initial public offering (IPO) has been pushed back on hopes that a possible MSCI upgrade will lead to higher valuation, Bloomberg reported, citing people with knowledge of the matter.

The Middle East’s biggest stock exchange plans to sell shares in 2019 at the earliest, instead of this year, sources told the news agency.

The exchange hopes waiting until after a possible classification as an emerging market by MSCI in June could increase trading volumes and help it achieve a better valuation for the Public Investment Fund, which owns the exchange, it added.

In 2016, Tadawul hired HSBC Holdings local unit to advise on the IPO, as part of the Kingdom’s privatization drive to diversify its economy off oil. 

The exchange “recognizes the importance of confidence-building and fair valuation in reflecting its capacity, infrastructure and liquidity,” a spokesman said.

"As the bourse moves forward with IPO planning and consultations with key stakeholders, the Tadawul will determine the best timing for a sale after considering all relevant factors," he added.