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Galfar IPO goes on sale

DUBAI — Shares of Oman's biggest construction firm, Galfar Engineering and Contracting Company, yesterday go on sale to the public for the first time with little hint the country's main stock index will dip as a result.

Galfar is looking to raise RO60 million ($155.9 million) in only the second initial public offering in Oman this year, offering 100 million shares to Omani nationals and the rest to foreigners, according to a prospectus for the sale posted on the bourse's web site.

"The market won't be much affected by this as institutional rather than retail players dominate," said Jayesh Shah, head of brokerage at Bank Muscat. Stock indicies in the Gulf have traditionally declined ahead of and during IPOs as small investors sell to raise funds to purchase IPO shares.

Oman's index is the second best performer in the Gulf this year, up more than 18 per cent. It climbed 0.92 per cent on Thursday to a record close, paced by BankMuscat.

Except for Bahrain, which rose one per cent, Omani stocks were the only gainers in the Gulf last year, when Saudi Arabia, Dubai and Abu Dhabi lost about half their value.

Of the Galfar shares on sale, 60 million belong to three existing holders and the remainder will be new, according to the prospectus.

Some of the funds will go towards buying equipment for the company. After the sale, the founders will hold 60 per cent of the company and the public the rest.

Galfar, set up in 1972, posted a profit of RO8.34 million in the five months to May 31, the prospectus says, without giving a comparison. Its order book at the end of last year was worth RO450 million. The sales closes on September 10.