• Home
• /
• Business

DIFX expects upto 15 firms to list in 2006

Chief Operating Officer Nasser Al Shaali said the announcement that Kingdom Hotel Investments (KHI) would list on the exchange was a “major milestone” for DIFX. He told Reuters in an interview he expected a number of equity, debt and derivative products to follow later this year.

KHI, majority owned by Saudi billionaire Prince Alwaleed bin Talal, said yesterday it would launch an IPO on DIFX, the first company to announce a primary listing on the bourse. It declined to say when subscriptions would open, or how much it planned to raise.

CEO Zok Sarmad said the firm chose DIFX because of its strong regulation. “DIFX requires companies to have certain standards with regard to corporate governance. It fits perfectly with our objectives,” he told a news conference.

The Gulf Arab states are home to seven domestic stock exchanges. Trading has been brisk in recent years, fuelled mainly by high oil prices, but local Arab markets have a reputation for insider trading, manipulation and government intervention in the pricing of share sales.

DIFX opened in September, hoping the promise of world class regulation would lure international issuers, investors and intermediaries who had previously shunned Arab securities.

However, virtually no trading took place in the first four months, and while investment bankers say they have foreign clients looking at DIFX listings, they are concerned about the illiquid secondary market.

Arab telecommunications firm Investcom became the first firm to list on DIFX just days after its launch, but its depository receipts were not traded for months. Deutsche Bank launched nine certificates tracking international indexes such as the S&P 500, but they also attracted little trade.

However, DIFX recorded a number of small but significant successes in late January.