Cargo firm SAL Saudi Logistics Services jumped as much as 30% on its Riyadh trading debut after raising $678 million in the kingdom’s second-largest initial public offering of the year.
Shares in Saudi Arabia’s leading cargo handler opened at 116.6 riyals on Wednesday, up from the offer price of 106 riyals per share, which was at the top of the range. Shares advanced to 137.8 riyals apiece.
The listing comes as Saudi Arabia pushes to become a global supply chain hub as part of its plans to diversify the economy. Earlier this week, the government said it plans to open up the aviation industry to more competition, part of an overhaul that’s estimated to drive a $100 billion investment in the sector by the end of the decade.
The deal caps a busy two months for Saudi new share sales, a sign that sentiment remains strong despite concerns that deepening Middle East tensions could disrupt a booming IPO market. SAL’s listing is the kingdom’s largest after the $1.2 billion offering of oil driller ADES Holding Co., which surged by the 30% limit on debut.
SAL’s listing brings Saudi Arabia’s total IPO proceeds for the year to over $3 billion. New share sales in Riyadh had come to a virtual standstill at the start of the year as weaker oil prices precipitated a drop in the benchmark index. Offerings in what’s usually the Gulf’s biggest and busiest listings market began to gather speed in the summer.
SAL is the leading cargo handling firm in Saudi Arabia with a roughly 95% market share, and also works in transit and export shipments. The company had revenue of 1.22 billion riyals ($325 million) in 2022 and net income of 362 million riyals. In the first half of this year, SAL posted revenue growth of 15% year-on-year.
HSBC Holdings Plc’s Saudi unit managed the IPO.
