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| 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 million square metre seaport, an 8 million square metre industrial district and 500,000 square metres of office space, shows that the government is determined to bring this grand design to reality.