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ALMOST 9 MILLION SAUDIS applied for shares in Bank Albilad, the latest flotation on the rapidly developing Saudi Arabian Stock Exchange. That is more than half the population and an even higher proportion of those holding bank accounts, a requirement for buying shares. About SR8 billion ($2.3 billion) was put forward for only SR1.5 billion-worth of shares. Bankers say that with such a large number of frustrated investors, the shares might rise to 10 times their issue price when trading starts later this month.
There appears to be no end to interest in the primary equity market from both investors and issuers and it is being encouraged energetically by ministers.
Setting up fully regulated capital markets has been painfully slow, largely because of Saudi Arabia's ponderous bureaucracy, but the country is now starting to reap the rewards for having a properly managed and technologically sophisticated structure.
The kingdom is now poised for far-reaching transformation in its financial system, which has been little changed for years and dominated by a dozen banks.
This will include more involvement from foreign institutions, a wider variety of services, including corporate bonds and greater use of Islamic finance, and better and tighter regulation.