CMA approves allocation ratio favouring small investors

Al Qasabi: RO 700 million is huge turnout

The Capital Market Authority has announced approval of allocation ratio for the share of Al Sawadi and Al Batinah Power Companies taking into account the largest segments of subscribers represented by small investors.

Ahmed Sulaiman Al Qassabi, acting Director General of  Issues and Disclosure of the CMA said the size of subscription of the two companies’ shares has exceeded  10 times the offered shares for each company, hence CMA considered allocation of shares  taking into consideration the  small investors to provide investment opportunity in MSM for new segment of investors  and to reduce concentration in holdings which is suffered by most stock markets in the region. He added the approach would widen the participation base in the stock market and trading in shares.

Al Qassabi pointed out that allocation of the shares of Al Sawadi Power was on the basis of allocation of the minimum limit for small investors at 5,000 shares and allocation ratio of 9.2% for each subscriber, and allocation of 4.96% for the segment of institutional investors. Allocation of the shares of Al Batinah Power was on the basis of allocation of  the minimum limit for small investors at 5,000 shares and 8.2% for each subscriber, and allocation of 4.87% for institutional investors.

Al Qassabi describe the huge turnout as a positive indicator on the desire and confidence of investors to  avail the investment in the stock market further to benefiting from the liquidity in activating the economy which would provide jobs  for the youth in addition to the other economic and social benefits. He added the demand for subscription was RO 700 million while the value of the offered shares was RO  62.5 Million.

Al Qassabi concluded that CMA encourages all investors to focus on long term investments instead of adopting rapid exit policy so as to achieve higher benefits when the issuer invest the funds in investment activities which have impact on the national economy.

It is noteworthy that  Al Sawadi and Al Batinah Power Companies had  offered 35% of the founder’s  shares  for the public at RO 62.5 Million during the period 9 May – 9 June 2014.