Qatar's Mesaieed soars on debut, Egypt bourse retreats on political uncertainty

Qatar's Mesaieed Petrochemical Holding soared on its first day of trading on Wednesday, while Egypt's bourse retreated because of uncertainty over the timing of a hoped-for presidential bid by Field Marshal Abdel Fattah al-Sisi. Shares in Mesaieed, a unit of state-owned Qatar Petroleum, rocketed 450 percent from their initial public offer price to close at 55.0 riyals, after touching an intra-day high of 73.90 riyals. It was Qatar's first new listing since 2010.
Because the IPO was only open to Qatari investors and a limited amount of information was released by the company, the stock has only been thinly covered by analysts. But most estimates for fair value were around 20 riyals. In order to ensure success of the $880 million IPO, the Qatari government made the terms very attractive to investors, including the promise of bonus shares if people who bought in the offer keep the bulk of their holding in coming years. This created a supply squeeze on Wednesday. The vast majority of trade was by Qatari investors; institutions were largely absent, having mostly been excluded from the IPO. Some fund managers said they were deterred by a shortage of information about the stock.
CI Capital of Cairo sent out an 'overweight' rating on the stock before trading hours, with a target of just 21 riyals. "Retail investors just want to own the stock - it has overheated though, and risen far above the consensus fair value," said Ahmed Shehada, head of trading at QNB Financial Services. Trading in Mesaieed did not affect the main Qatari stock index, which slipped 0.1 percent. According to exchange rules, a newly listed stock cannot be included in an index until after six months.
In Cairo, an official government source said Sisi would keep his post as defence minister in a new government that is being formed after the old one unexpectedly resigned on Monday. Mohamed Radwan, director of international sales at Pharos Securities in Cairo, said investors assumed Sisi - the market's favourite for president - would not declare a bid for the post while he remained a minister.
Most investors still think Sisi is likely to run in and win presidential elections expected sometime in coming months, but there is disappointment that the announcement of his bid may not be imminent. The main stock index fell 0.4 percent to 7,998 points, down for a second session since Monday's 65-month high. "The market broke the 7,500 level smoothly but it will struggle to make gains here, and might make up for the missed correction at that level," Radwan said. In Saudi Arabia, shares in Saudi Arabian Mining Co (Ma'aden) rose 4.0 percent to their highest level since April 2013 in heavy trade after a local media report said new gold and copper deposits had been discovered in the country.
Al Arab News said six gold and two copper deposits were found, quoting the Saudi Geological Survey. It did not elaborate on whether or how these deposits might be exploited, but Ma'aden is active in gold and base metals mining. Saudi Arabia's index eased 0.04 percent after Tuesday's five-year high. Elsewhere, Dubai contractor Arabtec gained 0.6 percent in pre-opening trade before being suspended for the day for an announcement. Arabtec then denied Monday's Reuters report that it was in talks to acquire Kuwaiti construction firm Kharafi National.