The Scoop
Several Saudi companies are lining up to sell shares on the local exchange next year, led by food and beverage brands looking to capitalize on rising consumer spending.
Half Million, the coffee chain founded by two scions of the billionaire Al Rajhi banking family, has hired EFG Hermes and SNB Capital to advise on an initial public offering, according to people familiar with the matter.
Two other local cafes — Barns and The Coffee Address — have started talks with banks about potential share sales, while luxury retailer and restaurant chain Bateel is in discussions with advisers after already hiring Morgan Stanley, people familiar said.
Beyond the consumer space, health care products distributor Tamer Group is working with HSBC on an IPO that could go ahead next year, the people said.
EFG Hermes, SNB Capital, and HSBC declined to comment. Half Million, Barns, Coffee Address, Bateel, and Tamer Group didn’t respond to requests for comment.
Know More
Spending on restaurants and cafes is among the biggest category of consumer outlays in the kingdom, with $2 billion spent in August — nearly 12% of total spending captured from payment machines, according to Saudi Central Bank data.
That appetite is driving a wave of cafe and restaurant openings, as young Saudis with higher disposable incomes and fewer social restrictions flock to public spaces where gender mixing was prohibited just five years ago.
Saudi Arabia’s market regulator is also pushing to boost trading on the exchange and help bring in investors to absorb the flood of new listings. The local stock market has underperformed emerging markets so far this year amid concerns over low prices and a government spending review that could weigh on corporate profits. The sentiment has affected Gulf IPOs, which are expected to decline to their lowest level since 2021.
Notable
Lower for longer oil prices may have an impact on consumer brands planning public offerings, Bloomberg reported.