An overwhelming 10 million Saudis, approximately half the country’s national population, subscribed to the 10-day initial public offering (IPO) of Emaar the Economic City (EEC), setting a new record in the kingdom’s capital market history.

Oversubscribed by 2.82 times, the SR2.55 billion ($679 million) IPO received 2.8 million applications with the total amount subscribed at SR7.18 billion.
In another record of sorts, the IPO fetched the largest-ever subscription through automatic teller machines (ATMs), demonstrating that Saudi nationals are increasingly tech and online savvy. Over 30 per cent of the total subscriptions were made via ATMs.
EEC’s fully underwritten IPO, open only for Saudi nationals, had on offer 255 million shares at a nominal value of SR10 each, the proceeds of which will be used towards the development of the King Abdullah Economic City (KAEC).
“The overwhelming response to the IPO is a direct result of the successful vision of the Custodian of the Two Holy Mosques, King Abdullah bin AbdulAziz Al Saud, to transform the kingdom’s economy,” said EEC chairman Mohamed Ali Alabbar. “The forward looking policies of the Saudi Government and the Capital Market Authority (CMA) as well as the strong and growing economy of the kingdom have played a key role in the success of the EEC IPO.”
Alabbar added that support from the Saudi Arabian General Investment Authority (Sagia) in the creation of the EEC and in making the world-class KAEC project a reality, was invaluable and “strengthened our resolve to move ahead with confidence.”
“We are thankful to the large number of Saudi investors for their trust in our company and in the prestigious KAEC project. As a path-breaking initiative, KAEC will usher in a new era of economic prosperity for the kingdom and play a critical role in the housing, education, healthcare, financial and economic sectors. Besides, the project will also create over 500,000 employment opportunities for Saudi citizens amongst its various components. The huge response to the IPO is therefore a reiteration of the confidence investors have in the project and the value it brings to Saudi society,” Alabbar said.
Alabbar went on to say that the emerging investor appetite for sound offers in the stock market, as reflected in the overwhelming response for the EEC IPO, was a “signal of confidence in the capital market and in a new phase of balanced growth that is based on sound fundamentals and the financial performance of companies.”
 Nidal Jamjoom, chief executive officer, EEC, remarked: “The investor confidence in the EEC IPO adds momentum to the KAEC project, which has already made significant progress with site development work underway on the project’s first boulevard and geotechnical investigations being conducted.” 
 The IPO was fully underwritten with the Saudi British Bank (Sabb) as lead underwriters and Riyad Bank and National Commercial Bank (NCB) acting as sub-underwriters. HSBC is the exclusive financial advisor on the IPO with Sabb appointed as lead manager. KPMG Al Fozan & Bannaga are the registered auditors and reporting accountants while Baker & McKenzie are the legal advisors.
The 11 receiving banks that supported the subscription were: Sabb, NCB, Bank Al Bilad, Bank Al Jazira, Riyad Bank, Banque Saudi Fransi, the Saudi Hollandi Bank, the Saudi Investment Bank, Arab National Bank, Al Rajhi Banking & Investment Corporation and Samba Financial Group.
Ioannis Karapatakis, HSBC managing director, Global Investment Banking Advisory, said the EEC IPO was a trend-setter with investors showing their preference for alternative channels such as ATMs, the Internet and telebanking to subscribe to the shares. “It is a robust indication that Saudi investors are now more tech-savvy. The IPO marked the first time, anywhere in the world, that a large number of subscriptions were conducted through ATMs,” he said.
Adel Marzook Al-Nasser, deputy managing director, Sabb, said the fact that over 30 per cent subscribed through ATMs was “a very encouraging trend.” Sabb was proud to have served as the lead manager of the record-breaking IPO.
EEC is a consortium headed by global real estate major Emaar Properties PJSC and a number of high-profile investors from Saudi Arabia. Net proceeds from the offering will be used by EEC to finance the SR100 billion King Abdullah Economic City.  Sagia, the body responsible for inward investments, is the prime facilitator of KAEC, the single largest private sector initiative in the Kingdom.
King Abdullah Economic City, which encompasses over 55 million sq m, will undertake mixed-use developments in its six components: a modern world-class seaport, an industrial district, a financial island, an educational and healthcare zone, resorts and a residential area. The city, occupying a pristine location off the Red Sea in the north of Jeddah, will be completed in stages, with the first batch of commercial houses and residential apartments getting ready within 30 to 36 months.