Arqaam Capital Arabia: “STC Solutions” Can Qualify for Express Access to “FTSE”

Arqaam Capital predicts that the Arab Internet services and communications company “solutions by stc” will qualify for fast membership in the FTSE index immediately upon its inclusion in the event in whose market value of the company exceeds 17 billion riyals, upon completion of its offer in the Saudi market.

The numbers indicate that the inclusion of solutions in the index could open the door to cash flows ranging from $ 30 to $ 40 million.

When it comes to joining the MSCI index, the possibility of inclusion in the index remains lower, according to the report by Arqaam Capital.

The report confirmed that it was optimistic about the prospects for Holoul’s IPO, noting that the company’s market value could exceed 20 billion riyals in the first few days of trading.

Arqaam Capital’s macroeconomic analyst Noaman Khaled said that swift membership of the FTSE index requires the total size of the tradable company to exceed $ 920 million, compared to the normal entry requirement level of $ 620 million.

Speaking with Al Arabiya, he added that there is a big chance that the size of the company will exceed $ 920 million, and thus it will be eligible to be a part of the FTSE Emerging Markets index.

He explained that quick sign-up usually happens after the fifth trading day of the offer.

MSCI

Regarding membership of the MSCI emerging markets index, questyear will be difficult, according to Khaled, as his requirements are higher than the FTSE index.

He explained that normal index membership requires the size of the company to be $ 1.5 billion, and this membership happens in February or May 2022.

He pointed out that rapid membership of the “MSC” index requires the size of the company to be approximately $ 2.5 billion, and this is difficult for STC solutions to achieve.

The company was expected to join this index next year, which could attract inflows of around $ 100 million.

the proposal

On Sunday, the company announced the prospectus relating to the offering of its shares in public subscription on the main Saudi stock exchange, “Tadawul”.

The company intends to offer 24 million shares, equal to 20% of its capital.

The application registration period for the participating categories “institutions” and the order book construction process starts from 5 to 13 September and for a period of 9 days.
This occurs after the Capital Market Authority has approved the company’s request to offer in public subscription of part of its shares.

The subscription of the shares in offer is limited to two tranches of investors, tranche (A), which are the participating categories.This segment includes the categories that are entitled to participate in the construction of the order book according to the instructions for building the order register and assignment of shares in the initial subscriptions issued by the Board of the Capital Markets Authority.

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