SPNEC ends higher on debut

The Saudi Public Transport Network Company (SPNEC) made its debut on the Saudi Stock Exchange (Tadawul) on Sunday, and ended the day higher than its initial public offering (IPO) price.

SPNEC, which operates the Riyadh Metro, raised $533 million in its IPO, making it the largest IPO in Saudi Arabia since 2019. The company offered 24 million shares at a price of 22 riyals ($5.87) per share.

On its first day of trading, SPNEC’s shares opened at 24.5 riyals ($6.53) and closed at 25.3 riyals ($6.74), up 15.9% from its IPO price. The company’s market capitalization reached $2.1 billion.

The strong debut of SPNEC is a positive sign for the Saudi stock market, which has been struggling to attract investors amid the COVID-19 pandemic and low oil prices. The Tadawul has seen a number of IPOs in recent months, including the listing of Saudi Aramco, the world’s largest oil company, in December 2019.

SPNEC’s successful IPO is also a reflection of the growing demand for public transportation in Saudi Arabia, as the government seeks to reduce reliance on oil revenues and diversify the economy. The Riyadh Metro, which is operated by SPNEC, is the largest public transport project in the Middle East, with six lines and 85 stations.

The metro system, which began operations in 2019, has already had a significant impact on the city’s traffic congestion and air pollution. It is expected to transport more than 1 million passengers per day by 2030.

SPNEC’s strong debut is a testament to the company’s solid financial performance and growth prospects. The company reported a net profit of $68 million in 2020, up from $45 million in 2019. Its revenue also increased by 16% to $1.1 billion in 2020.

Investors are optimistic about SPNEC’s future growth, as the company plans to expand its operations beyond the Riyadh Metro and into other cities in Saudi Arabia. The company is also exploring opportunities to operate public transport systems in other countries in the region.

In conclusion, SPNEC’s successful IPO and strong debut on the Tadawul is a positive sign for the Saudi stock market and the country’s economy as a whole. The company’s growth prospects and solid financial performance make it an attractive investment opportunity for both local and international investors.