Wataniya Palestine IPO a big draw

A strong appetite for the telecommunications sector continues to prevail as Wataniya Palestine¿s initial public offering was at least 1.5 times oversubscribed.

A strong appetite for the telecommunications sector continues to prevail as Wataniya Palestine's initial public offering (IPO) was at least 1.5 times oversubscribed.

The success has lifted sentiment in the Palestinian Territories, and Ahmad Aweidah, the chief executive of the Palestine Exchange, revealed there would be an IPO of the Palestine Insurance Company next month.

The Palestinian Territories's second mobile operator behind PALTEL raised more than US$75 million, far more than the $50.3m initially offered for the company. That was based on a fixed price of $1.30 per share.

Telecoms IPOs have been a bright spot in the Middle East, with Axiom Telecom also expected to list this week.

Demand for Wataniya came from retail investors in the Palestinian Territories and international institutional investors based mostly in Europe and the Middle East. The IPO will add about 14 per cent to the company's total market capitalisation, bringing it to about $335.4m.

Wataniya joins 40 companies traded on the Palestinian exchange that have a combined market capitalisation of about $2.5 billion.

"I've been blown away," said Michael Bevan, the head of MENA equity capital markets at HSBC, the sole book-runner for the offer.

"Telecoms is a good sector for difficult times because people always want to use their mobile," he said, adding that buyers of the stock were drawn in by a young company that has growth potential.

The operator launched in November last year and has captured 20 per cent of the mobile market share.

It has the backing of Qatar Telecom, which owns 53 per cent of the company, and the Palestinian Investment Fund, which owns 47 per cent, and is expected to list on the Palestine Exchange next month.

Wataniya received bids for 58.05 million new shares compared with the 38.7 million on offer. The shares represent a 15 per cent free-float of the company.

It was required to list at least 30 per cent of its shares by the local regulator. The next 15 per cent tranche of shares is expected to be offered within the next few years, though Mr Bevan said he did not expect that to be "any time soon".