October 9, 2018 / 5:24 PM / 2 months ago

UPDATE 1-Saudi's NCB Capital advises finance duo on potential IPOs -sources

(Adds IPO detail)

By Tom Arnold, Hadeel Al Sayegh and Marwa Rashad

DUBAI/RIYADH, Oct 9 (Reuters) - NCB Capital, the investment banking unit of Saudi Arabia’s largest lender, is advising two local finance companies, Amlak International for Real Estate Finance and Nayifat Finance, on possible share listings, sources familiar with the matter said.

The kingdom is encouraging more companies to list on the stock market in an effort to deepen capital markets under an economic reform push aimed at reducing the reliance on oil revenue.

Both Amlak and Nayifat operate within sectors the government is keen to develop.

Amlak, founded in Riyadh in 2007 provides real estate financing, while Nayifat offers financing to small and medium-sized enterprises and consumer finance.

The government has set a target for the mortgage market to reach a total value of 502 billion riyals ($133.9 billion) by 2020, from a current 290 billion riyals, and also wants to raise SMEs’ financial sector financing to 5 percent by 2020, from 2 percent now.

Two of the sources said Amlak was targeting an initial public offering (IPO) by the end of the year and was considering floating 30 percent of the company. Nayifat was weighing selling a smiliar-sized stake, one of the sources said.

Amlak’s shareholders include the Saudi Investment Bank and Amlak Finance, a Dubai-based Islamic mortgage company. The company has assets of about 3.1 billion riyals. Nayifat has assets of about 1.9 billion riyals.

NCB Capital declined to comment, while Amlak and Nayifat did not respond to requests for comment.

Activity in the public market has been subdued in recent months, with several companies delaying flotations. IPOs for ACWA Power, Saudi Stock Exchange and Arabian Centres have all stalled. ($1 = 3.7503 riyals) ($1 = 3.7506 riyals) (Reporting by Tom Arnold and Hadeel Al Sayegh Editing by Louise Heavens and David Goodman)

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