Biggest Saudi Listing Since Aramco Slumps on Day 2
ACWA Power International slumped as much as 10% on its second day as a listed company, giving up some gains from a debut that saw the stock surge by the daily limit.
Shares in the utility closed down 8.4% at 66.7 riyals ($17.78) on Tuesday. All six companies that have listed in the kingdom this year have surged on opening day, but ACWA is the first that hasn’t been able to carry the momentum into a second session.
Still, the company is seen as key to Saudi Arabia’s efforts to diversify from oil and analysts expect it to continue to grow. ACWA’s IPO attracted more than $300 billion in orders and it raised more than $1.2 billion in the biggest Saudi Arabian listing since Aramco’s two years ago.
“ACWA’s growth potential and unique positioning in the whole region’s efforts to grow in renewables and replace conventional power capacities with clean energy sources is appealing,” said analysts at Arqaam Capital, who have a “buy” rating and a 73 riyal price target on the stock.
The company is part of Saudi Arabia’s efforts to use solar, wind and natural gas to make hydrogen and become one of the world’s biggest exporters. The market for the fuel barely exists today, but could be worth $700 billion annually by 2050, according to BloombergNEF.
“ACWA has lots of projects coming online in the next few years and is expected to see a high growth trajectory,” said Pritish Devassy, head of equity research at Al Rajhi Capital. “It’s also got fast entry into major indices, which will generate interest from fund managers.”
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