An initial public offering, launched on Tuesday by Saudi billionaire Prince Alwaleed bin Talal’s Kingdom Holding was this week the target of the kind of attack that is increasingly common in business in the region – a critical religious edict or fatwa.| "Oopsie", said the scorpion, blushing furiously. "I gotta be me." |
Cleric Mohammed al Ossaimi, who has pronounced on the religious credentials of other IPOs, said on a website that some of Kingdom HoldingÂ’s investments were in businesses inimical to Islamic values, such as usury and alcohol. The cleric cited the companyÂ’s stakes in financial groups that do not comply with Islamic law, such as Citigroup and SaudiÂ’s Samba Financial Group, which is managing the IPO. He also cited the princeÂ’s stakes in entertainment companies such as Time Warner and News Corporation and hotel group Four Seasons and Fairmont.
Analysts say the fatwa is unlikely to affect the fate of Kingdom Holding’s $860m (€631m, £427m) offering. “Islamic-minded investors will already know that commercial banks and hotels are off-limits – it shouldn’t have too much of an impact,” said Joe Kawkabani of Dubai-based asset management firm Algebra Capital.
| The use of fatwas to influence investors is common in Saudi Arabia, where the popularity of Islamic finance is boosting the role of clerics. |
Despite last year’s crash in Saudi and Gulf markets, oil price-fuelled liquidity has helped maintain the healthiest IPO market activity in at least five years, according to Zawya, a Dubai-based business information provider. In the year to date, 20 Saudi IPOs have raised $3.7bn – nine times that raised in three offerings in the same period last year. Some stocks have fallen on their first day’s trading. Half of the 315m-share Kingdom Holding issue which closes on July 18 is reserved for institutional investors and the other half for Saudi retail buyers. Bankers say the institutional portion is twice oversubscribed.
“With this IPO, we will give the people
| "And I would like to thank Mullah Ossaini for the street cred." |