Goldman Sachs to test Saudi Arabia’s market rules to limit stock swings post IPO

The Goldman Sachs Group Inc. logo is displayed in the reception area of the One Raffles Link building, which houses one of the Goldman Sachs (Singapore) Pte offices, in Singapore, on Saturday, Dec. 22, 2018. Photographer: Nicky Loh/Bloomberg

Goldman Sachs Group Inc. will test Saudi Arabia’s new market rules that aim to limit price swings after share sales.

The US bank is acting as stabilization agent for mall owner Arabian Centres, which is expected to start trading this week after completing the kingdom’s biggest initial public offering since 2015. Arabian Centres raised about 2.47 billion riyals ($659 million) after pricing shares at the bottom end of the range.

Goldman Sachs may sell additional shares or take other actions to support the Arabian Centres shares once they list. The mall owner allocated an extra 12.8 million shares, or 13.5% of the offering, to the bank, according to a statement from the Capital Market Authority.

Saudi Arabia’s market regulator approved the stabilization rules last year and Arabian Centres is one of the first companies to use them.

Market Volatility

Arabian Centres is set to debut amid a bout of volatility in the Gulf as geopolitical tensions spill over into equity markets. A metric for short-term swings on the main Saudi index jumped last week to the highest level since October.

Finablr Plc slumped 10% in its London trading debut last week after the United Arab Emirates-based financial-services firm slashed its IPO price on low investor demand. The shares are 2.3% lower than their trading debut.