BUSINESSFebruary 4, 2013, 11:51 a.m. ET
AsiaCell Shares Rise on Debut
By NIKHIL LOHADE
DUBAI—Shares of Asiacell Communications, in which Qatar Telecom owns a majority stake, traded higher in their market debut on Monday after the Iraqi telco raised about $1.3 billion in the Middle East's largest initial public offering since 2008.
Asiacell's share sale, a regulatory requirement that formed part of its telecom license agreement, was widely seen as a barometer for investor interest in Iraq as it recovers from years of war.
An Iraqi employee sells Asiacell simcards for cell phones in the Asiacell company headquarters in Baghdad in December.
The offer for 67.5 billion shares priced at 22 Iraqi dinars ($0.02) each was fully subscribed. Qtel acquired shares worth $207.12 million in the IPO to increase its stake in Asiacell to 64.06%, from 60%.
Asiacell shares closed at 23.25 dinars Monday, after hitting an intraday high of 24.2 dinars, with about 32 million shares changing hands.
"It's the first day for a big issue. Several investors, who didn't apply, were waiting to see how the stock trades. In this scenario the volumes were good," a Baghdad-based trader at Rabee Securities said.
Some analysts had been skeptical that Asiacell would be able to raise the full $1.3 billion in the IPO amid fears about Iraq's continued political unrest and its illiquid market, which is dominated by bank stocks.
At issue price, Asiacell shares nearly doubled Iraq's total market capitalization to $9 billion.
"We cannot predict Asiacell performance from the first day but in general we and the investors are highly interested and there is trust in the company, the trading for the first day was very good and made profits," said Wisam Adel of Kassab Brokerage.
The stock's performance over the coming few weeks will be closely watched by investors, as well as the other two Iraqi telcos—Zain Iraq, a subsidiary of Kuwait's Zain Group, and Korek, an affiliate of France Télécom FTE.FR -2.06% —as they ready plans to go public.
All three Iraqi mobile-phone operators had been required to float a quarter of their shares by August 2011 as part of their license agreements, but missed the deadline.
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