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Saudi economic city passes the IPO test

Saudi investor interest in the IPO of the main company behind the King Abdullah Economic City was overwhelming. It is now hoped that the project will attract equivalent interest from foreign companies intent on participating in the special economic zone. Nigel Dudley reports.

The New Economics Arms Race

Plans for King Abdullah Economic City are ambitious; will the be successful?

SAUDI ARABIA’S STOCK market has been extremely volatile this year, with share prices at one stage falling by 54% in only 53 trading days, but this did not deter record numbers of private investors from pouring money into the IPO of Emaar the Economic City (EEC) last month. More than 10 million Saudis – about half the kingdom’s citizens – applied for shares, subscribing more than SR7 billion ($1.87 billion) for the SR2.55 billion issue for the 30% of the company that is being offered to the public.

The success of the IPO for EEC, which is the master developer for the King Abdullah Economic City, a $27 billion privately financed integrated commercial, residential and tourism special economic zone, shows that the kingdom is still awash with liquidity and there is still a big appetite for shares in local businesses.

The fact that work has already started on the project, which includes a 2.6

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