Well they have finally announced their initial public offering today with a rather low RO 60 million slice of their company up for grabs. There are 600 million 100 baiza shares on offer on the Muscat Securities Market for 102 baizas each. This apparently represents 40% of their paid capital (source).The 2 baiza's are for "Issue expenses". RO 1,200,000 / US$ 3,096,000 to issue an IPO - I'm in the wrong business!
Now, most people don't really care about this but I thought it was interesting as this is the first Islamic Bank to start here in Oman. Ok so Bank Muscat have some Islamic banking services on offer, and Bank Dhofar are looking to get in on the act too, but the boys from Bank Nizwa are the first dedicated Islamic banking crowd to setup up shop here.
The thing that keeps getting me scratching my head is: Islamic banking does not allow for the charging of interest. They make their money by purchasing assets, and then re-selling them to their customer at a higher price. Whether that's a car or a house - the bank buys it, and then allows it's customer to make installments over a period of time for the item. But, here's the rub - the bank can not levy penalties against their borrower for late payment. I'm sure there's more to it but I don't get it - but many people do.
Anyway, I'm digressing. I'd expect there to be a fairly hefty demand for these shares, so if you've got some cash and fancy a punt, RO 102 will buy you 1000 shares in Bank Nizwa. The offering closes on the 22nd May.
More tomorrow.
le fin.
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