The first day of Wataniya's initial public offering (IPO) yesterday met with optimism as analysts were bullish on the company's potential to raise more than US$50 million.
The Palestinian Territories' mobile phone operator is offering 38.7 million shares, priced at $1.30 a share, and will run the offer until December 2.
"This is extremely cheap and attractive," said Fadi al Said, a fund manager at ING who expressed interest in subscribing.
"People are eager to look at another new operator that has good potential for growth, because the first operator has been around for 10 years."
Wataniya is second to PALTEL, the Palestinian Territories' primary telecommunications operator that is dual-listed on the Abu Dhabi Securities Exchange and the Palestine Exchange. The territories had a mobile penetration rate of 49 per cent at the end of last year, one of the lowest in regional markets. Jordan's mobile rate stood at 101 per cent at the same time. High literacy rates and a young demographic also offer good opportunities for the company to grow.
The IPO represents 15 per cent of the company and, based on the offer price, its market capitalisation is forecast to reach $335.5m. The proceeds will be used to finance an expansion of Wataniya's network.
Wataniya, which already has an almost 20 per cent market share in the Palestinian Territories, said revenue rose to $11.3m in the third quarter from $9.1m in the second and $4m in the first quarter, when it began recording revenue.
It is 53 per cent owned by Qatar Telecom (Qtel) and 47 per cent by the Palestine Investment Fund (PIF), two strong strategic shareholders "with deep pockets", according to Ahmad Aweidah, the chief executive of the Palestine Securities Exchange.
"I doubt the IPO will fail … [telecoms] is a hot industry and there is good scope for Wataniya to grow," Mr Aweidah said.
The company will launch another 15 per cent tranche of shares in the next few years, reducing the stakes held by Qtel and PIF to 40 and 30 per cent respectively.
HSBC Bank Middle East is the sole global co-ordinator and book-runner. Arab Bank Group is the regional co-ordinator.