Wataniya IPO draws solid interest

Interest is strong for Wataniya IPO, and the region's forecast for growth in mobile penetration is high.

An initial public offering (IPO) by Wataniya, a mobile telecommunications operator in the Palestinian Territories, is forecast to be oversubscribed as the roadshow moves into its last week.

"We are going to be comfortably over the US$50 million mark," said Michael Bevan, the head of MENA equity capital markets at HSBC, the sole bookrunner for the offer.

"It's going well. [There has been] good local demand and we are now converting orders from international funds in the UK, US and Dubai."

Mr Bevan, speaking from the roadshow in London, would not comment on how much has been raised.

Wataniya, 53 per cent owned by Qatar Telecom (Qtel) and 47 per cent by the Palestine Investment Fund (PIF), is offering 38.7 million shares, priced at $1.30 a share. The offer will run until next Thursday.

The IPO represents 15 per cent of the company and, based on the offer price, its market capitalisation is forecast to reach $335.5m.

"I'm almost definite it will be oversubscribed," said Ahmad Aweidah, the chief executive of the Palestine Securities Exchange. "The indicators are very good, bearing in mind the highest activity usually happens in the last week of listing."

With another week to go before the offer closes, the IPO may offer a further fillip to Wataniya, which already has an almost 20 per cent mobile market share in the Palestinian Territories.

The proceeds will be used to fund Wataniya's network expansion.

It is second only to PALTEL, the Palestinian Territories's primary telecoms operator dual-listed on the Abu Dhabi Securities Exchange and the Palestinian exchange.

The potential for mobile penetration is high. The Palestinian Territories had a mobile penetration rate of 49 per cent at the end of last year, one of the lowest in the Middle East. Coupled with high literacy rates and a young population, there are good opportunities for growth.

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.